UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C. 20549

                               FORM 10-Q

(Mark One)

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005

[ ]  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 of Incorporation)                        (I.R.S. Employer
                                                    Identification No.)

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

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

                       _____________________________
           (Former name, former address and former fiscal year,
                      if changed since last report)

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 the 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 [X]    No [ ]

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).

                              Yes [ ]    No [X]

Number of Common Shares outstanding at October 31, 2005: 14,467,847
shares.


<PAGE>
                   GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                                     INDEX


PART I  - FINANCIAL INFORMATION......................................   1

Item 1  - Financial Statements.......................................   1

          Condensed Consolidated Balance Sheets at
          September 30, 2005 and December 31, 2004 (Unaudited).......   1

          Condensed Consolidated Statements of Earnings
          for the Three and Nine Months Ended September 30,
          2005 and 2004 (Unaudited)..................................   2

          Condensed Consolidated Statements of Cash Flows
          for the Nine Months Ended September 30, 2005 and 2004
          (Unaudited)................................................  3-4

          Notes to Condensed Consolidated Financial Statements
          (Unaudited)................................................  5-41

Item 2  - Management's Discussion and Analysis of
          Financial Condition and Results of Operations.............. 42-67

Item 3  - Quantitative and Qualitative Disclosures
          About Market Risk..........................................   68

Item 4  - Controls and Procedures....................................   68

PART II - OTHER INFORMATION..........................................   69

Item 1  - Legal Proceedings..........................................   69

Item 4  - Submission of Matters to a Vote of Security Holders........   69

Item 6  - Exhibits and Reports on Form 8-K........................... 69-70

SIGNATURE............................................................   71


<PAGE>
<TABLE>
                                           PART I
                                    FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS.

                            GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                             CONDENSED CONSOLIDATED BALANCE SHEETS
                                          (Unaudited)
                        (In thousands, except shares and per share data)

<CAPTION>
                                                      September 30, 2005   December 31, 2004
                                                      ------------------   -----------------
<S>                                                        <C>                 <C>
ASSETS
Current assets:
  Cash and cash equivalents.............................   $  98,962           $  23,714
  Receivables, net......................................     212,161             101,692
  Inventories...........................................     130,108              93,500
  Prepaid expenses and other............................       3,666              11,265
  Deferred income taxes.................................       2,292               1,834
                                                           ---------           ---------
    Total current assets................................     447,189             232,005
                                                           ---------           ---------
Property, plant and equipment...........................     745,218             671,851
Less accumulated depreciation and amortization..........    (292,683)           (265,475)
                                                           ---------           ---------
                                                             452,535             406,376
                                                           ---------           ---------
Goodwill................................................      50,592              40,303
Other assets............................................      24,129              23,722
                                                           ---------           ---------
                                                           $ 974,445           $ 702,406
                                                           =========           =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable......................................   $ 149,150           $  75,554
  Accrued expenses......................................      83,881              53,279
                                                           ---------           ---------
    Total current liabilities...........................     233,031             128,833
                                                           ---------           ---------
Long-term debt..........................................     274,742             292,759
Deferred income taxes...................................      72,785              41,039
Other liabilities and deferred income...................      23,418              23,336
Commitments and contingencies (Note 10)
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, 18,219,827 and
    16,085,631 shares issued............................         182                 161
  Additional paid-in capital............................     212,165             135,407
  Retained earnings.....................................     194,576             117,325
                                                           ---------           ---------
                                                             406,923             252,893
  Less common stock in treasury - at cost,
    3,751,980 shares....................................     (36,454)            (36,454)
                                                           ---------           ---------
    Total stockholders' equity..........................     370,469             216,439
                                                           ---------           ---------
                                                           $ 974,445           $ 702,406
                                                           =========           =========

See accompanying notes to Condensed Consolidated Financial Statements.

                                             1
</TABLE>


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

<CAPTION>
                                                         Three Months Ended      Nine Months Ended
                                                            September 30,           September 30,
                                                       ---------------------   ----------------------
                                                          2005        2004        2005        2004
                                                       ---------   ---------   ---------   ----------
<S>                                                    <C>         <C>         <C>         <C>
Net revenues.........................................  $1,085,225  $ 642,439   $2,660,309  $1,837,282
                                                       ----------  ---------   ----------  ----------
Cost of products sold (excluding depreciation
  and amortization)..................................     920,408    564,563    2,295,082   1,582,656
Operating expenses...................................      53,901     42,158      148,889     129,895
Depreciation and amortization........................       9,973      9,024       30,435      27,342
Selling, general and administrative expenses.........      15,431     10,110       35,072      28,362
Net loss/(gain) on the disposal/write-down of
  assets, including assets held for sale.............       1,055       (889)         835        (327)
Gain from insurance settlement due to fire incident..           -       (958)      (3,688)       (958)
                                                       ----------   --------   ----------  ----------
Operating income.....................................      84,457     18,431      153,684      70,312
Interest expense.....................................      (5,783)    (7,173)     (19,159)    (25,222)
Costs associated with early debt extinguishment......          17          -       (2,082)    (10,875)
Amortization of financing costs......................        (398)    (1,012)      (2,398)     (7,827)
Interest and investment income.......................         479         57          967         138
                                                       ----------  ---------   ----------  ----------
Earnings from continuing operations before
  income taxes.......................................      78,772     10,303      131,012      26,526
Provision for income taxes...........................      32,132      4,328       53,776      10,934
                                                       ----------  ---------   ----------  ----------
Earnings from continuing operations .................      46,640      5,975       77,236      15,592

Earnings/(loss) from discontinued operations,
  net of income tax (provision)/benefit of ($7),
  ($9) and $61.......................................           -         12           15         (99)
                                                       ----------  ---------   ----------  ----------
Net earnings.........................................  $   46,640  $   5,987   $   77,251  $   15,493
                                                       ==========  =========   ==========  ==========
Net earnings (loss) per common share:
  Basic
    Continuing operations............................  $    3.43   $    0.49   $     5.88  $     1.45
    Discontinued operations..........................          -           -            -       (0.01)
                                                       ---------   ---------   ----------  ----------
                                                       $    3.43   $    0.49   $     5.88  $     1.44
                                                       =========   =========   ==========  ==========
  Assuming dilution
    Continuing operations............................  $    3.38   $    0.48   $     5.80  $     1.42
    Discontinued operations..........................          -            -           -       (0.01)
                                                       ---------   ---------   ----------  ----------
                                            $    3.38   $    0.48   $     5.80  $     1.41
                                                       =========   =========   ==========  ==========

See accompanying notes to Condensed Consolidated Financial Statements.

                                             2
</TABLE>


<PAGE>
<TABLE>
                             GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                           (Unaudited)
                                         (In thousands)
<CAPTION>
                                                                            Nine Months
                                                                        Ended September 30,
                                                                      -----------------------
                                                                         2005          2004
                                                                      ---------     ---------
<S>                                                                   <C>           <C>
Cash flows from operating activities:
  Net earnings....................................................    $  77,251     $  15,493
Adjustments to reconcile net earnings to net cash provided by
  operating activities:
  Depreciation and amortization from continuing operations........       30,435        27,342
  Depreciation and amortization from discontinued operations......            -            88
  Amortization of financing costs.................................        2,398         7,827
  Deferred income taxes...........................................       27,566         4,037
  Deferred crude oil purchase discounts...........................          925         2,051
  Net loss/(gain) on the disposal of assets from continuing
    operations, including assets held for sale....................          835          (327)
  Net (gain) on the disposal of assets from discontinued
    operations, including assets held for sale....................          (22)          (36)
  Gain from insurance settlement of fire incident.................       (3,688)         (958)
  Income tax benefit from exercise of stock options...............          838           718
  Cash balance plan contribution..................................       (2,039)       (1,828)
  Changes in operating assets and liabilities
    (Increase) in receivables.....................................      (98,408)      (16,829)
    (Increase) decrease in inventories............................      (31,810)       24,422
    Decrease in prepaid expenses..................................        8,341         1,367
    (Increase) in other assets....................................         (170)       (2,904)
    Increase in accounts payable..................................       68,022         8,431
    Increase in accrued expenses..................................       20,938           292
    Increase in other liabilities.................................        1,521         2,593
                                                                      ---------     ---------
Net cash provided by operating activities.........................      102,933        71,779
                                                                      ---------     ---------
Cash flows from investing activities:
  Purchase of property, plant and equipment.......................      (48,390)      (39,842)
  Acquisition activity............................................      (39,405)            -
  Proceeds from assets held for sale..............................        1,948         9,354
  Yorktown refinery acquisition contingent payment................            -       (15,300)
  Proceeds from insurance settlement of fire incident.............        3,688         3,032
  Proceeds from sale of property, plant and equipment and
    other assets..................................................        2,213         1,765
  Funding of restricted cash escrow funds.........................      (21,883)            -
  Release of restricted cash escrow funds.........................       21,883             -
                                                                      ---------     ---------
Net cash used in investing activities.............................      (79,946)      (40,991)
                                                                      ---------     ---------
Cash flows from financing activities:
  Payments of long-term debt......................................      (18,828)     (205,616)
  Proceeds from issuance of long-term debt........................            -       147,467
  Long-term debt issuance costs...................................            -        (3,000)
  Proceeds from line of credit....................................       51,245        10,000
  Payments on line of credit......................................      (53,959)      (27,573)
  Net proceeds from issuance of common stock......................       74,406        57,374
  Proceeds from exercise of stock options.........................          564         1,418
  Deferred financing costs........................................       (1,167)       (3,834)
                                                                      ---------     ---------
Net cash provided by (used in) financing activities...............       52,261       (23,764)
                                                                      ---------     ---------
Net increase in cash and cash equivalents.........................       75,248         7,024
  Cash and cash equivalents:
    Beginning of period...........................................       23,714        27,263
                                                                      ---------     ---------
    End of period.................................................    $  98,962     $  34,287
                                                                      =========     =========

                                              3
</TABLE>


<PAGE>
Significant Noncash Investing and Financing Activities. In the first
quarter of 2005, we transferred $118,000 of property, plant and equipment
to other assets. In the second quarter of 2005, we contributed 34,196
newly issued shares of our common stock, valued at $972,000, to our 401(k)
plan as a discretionary contribution for the year 2004. In connection with
our acquisition activity, we assumed approximately $18,362,000 of
liabilities.

At September 30, 2005, approximately $5,810,000 of purchases of property,
plant and equipment had not been paid and, accordingly, were accrued in
accounts payable and accrued liabilities. In the first quarter of 2004, we
contributed 49,046 newly issued shares of our common stock, valued at
$900,000, to our 401(k) plan as a discretionary contribution for the year
2003.

See accompanying notes to Condensed Consolidated Financial Statements.







































                                    4


<PAGE>
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (Unaudited)

NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION, STOCK-BASED EMPLOYEE
         COMPENSATION AND CURRENT PRONOUNCEMENTS:

Organization

     Giant Industries, Inc., through our subsidiary Giant Industries
Arizona, Inc. and its subsidiaries, refines and sells petroleum products.
Our operations are located:

     -  on 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
        meet.

     In addition, our wholesale distribution subsidiaries distribute
commercial wholesale petroleum products primarily in Arizona and New
Mexico.

     We have three business segments:

     -  our refining group;
     -  our retail group; and
     -  our wholesale group.

     See Note 9 for a further discussion of our business segments.

Basis of Presentation:

     The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with accounting principles
generally accepted in the United States of America, hereafter referred to
as generally accepted accounting principles, for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information
and notes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments and reclassifications considered necessary for a fair and
comparable presentation have been included. These adjustments and
reclassifications are of a normal recurring nature, with the exception of
discontinued operations (see Note 4). Operating results for the three and
nine months ended September 30, 2005 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2005. The
accompanying financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in our Annual
Report on Form 10-K for the year ended December 31, 2004.






                                    5


<PAGE>
     We have made certain reclassifications to our 2004 financial
statements and notes to conform to the financial statement classifications
used in the current year. These reclassifications relate primarily to
discontinued operations reporting (see Note 4). They had no effect on
reported earnings or stockholders' equity.

Stock-Based Employee Compensation:

     We have a stock-based employee compensation plan that is more fully
described in Note 10 to our Annual Report on Form 10-K for the year ended
December 31, 2004. We account 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. We use the intrinsic value method to account for stock-
based employee compensation. The following table illustrates the effect on
net earnings and earnings per share as if we had applied the fair value
recognition provisions of Statements of Financial Accounting Standards
("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,
                                        ------------------    ------------------
                                          2005       2004       2005       2004
                                        -------    -------    -------    -------
                                          (In thousands, except per share data)
<S>                                     <C>        <C>        <C>        <C>
Net earnings, as reported.............  $46,640    $ 5,987    $77,251    $15,493
Deduct: Total stock-based employee
  compensation expense determined
  under the fair value based method
  for all awards, net of related
  tax effect..........................        -        (24)       (24)      (123)
                                        -------    -------    -------    -------
Pro forma net earnings................  $46,640    $ 5,963    $77,227    $15,370
                                        =======    =======    =======    =======
Earnings per share:
  Basic - as reported.................  $  3.43    $  0.49    $  5.88    $  1.44
                                        =======    =======    =======    =======
  Basic - pro forma...................  $  3.43    $  0.49    $  5.88    $  1.44
                                        =======    =======    =======    =======
  Diluted - as reported...............  $  3.38    $  0.48    $  5.80    $  1.41
                                        =======    =======    =======    =======
  Diluted - pro forma.................  $  3.38    $  0.48    $  5.80    $  1.40
                                        =======    =======    =======    =======
</TABLE>







                                    6


<PAGE>
     In December 2004, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 123R, "Share-Based Payment" that revised SFAS No. 123.
This revision requires us to measure the cost of employee services
received in exchange for stock options granted using the fair value method
as of the beginning of the first interim or annual reporting period that
begins after June 15, 2005. We will adopt this statement beginning January
1, 2006. We do not expect this statement to have a material impact on our
financial statements.

Current Pronouncements

     The Emerging Issues Task Force (EITF) of the FASB, under Issue No.
04-13, Accounting for Purchases and Sales of Inventory with the Same
Counterparty, reached a consensus in September 2005 that some or all of
such buy/sell arrangements should be accounted for at historical cost
pursuant to the guidance in paragraph 21(a) of APB Opinion No. 29,
Accounting for Nonmonetary Transactions. Our buy/sell arrangements with a
single counterparty are reported on a net basis and, accordingly, we
believe we are in compliance with this EITF.

     In November 2004, FASB issued SFAS 151, "Inventory Costs - An
Amendment of ARB No. 43, Chapter 4", which is effective for fiscal years
beginning after June 15, 2005. This Statement requires that idle capacity
expense, freight, handling costs, and wasted materials (spoilage),
regardless of whether these costs are considered abnormal, be treated as
current period charges. In addition, this statement requires that
allocation of fixed overhead to the costs of conversion be based on the
normal capacity of the production facilities. We do not expect this
statement to have a material impact on our financial statements.

     In June 2005, the EITF Task Force reached a consensus in Issue No.
05-6, "Determining the Amortization Period for Leasehold Improvements".
The consensus provides that leasehold improvements placed in service at
the beginning of the lease term, should be amortized over the lesser of
the useful life of the assets or the lease term, including renewals
reasonably assured at the date the leasehold improvements are purchased.
We do not expect this consensus to have a material impact on our financial
statements.

     On July 14, 2005, FASB issued an exposure draft of a proposed
interpretation, "Accounting for Uncertain Tax Positions-An Interpretation
of FASB Statement 109". The proposed effective date is December 15, 2005
but has been deferred to 2006. Under FASB's proposal, the initial
recognition of uncertain tax benefits would be based on whether the
underlying tax position is "probable" of being sustained under audit by
the relevant taxing authority. The "probable" confidence threshold would
be based on the definition of probable in FASB Statement No. 5,
"Accounting for Contingencies". We will monitor the status of this
exposure draft and evaluate the effects, if any, on our financial
statements in the future.





                                    7


<PAGE>
     In December 2004, the FASB issued SFAS 153, "Exchanges of Nonmonetary
Assets - An Amendment of AB Opinion 29". The basic principle in Opinion 29
provides that nonmonetary exchanges should be measured based on the fair
value of the assets exchanged. The guidance in that opinion, however,
provides an exception to this principle if the exchange involves similar
productive assets. This statement amends Opinion 29 to eliminate the
exception for nonmonetary exchanges of similar productive assets and
replaces it with a general exception for exchanges of nonmonetary assets
that do not have commercial substance.  A nonmonetary exchange has
commercial substance if the future cash flows of the entity are expected
to change significantly as a result of the exchange. We do not expect this
pronouncement to have a material impact on our financial statements.

     In October 2004, the EITF reached a consensus on Issue No. 04-10,
"Determining whether to aggregate operating segments that do not meet the
quantitative thresholds". This EITF provides guidance on when operating
segments that do not meet the quantitative thresholds can be aggregated.
In summary, in order to aggregate such operating segments, aggregation
must be consistent with the basic principles of SFAS 131, "Disclosures
about Segments of an Enterprise and Related Information", have similar
economic characteristics, and share a majority of certain business
attributes. We do not expect this EITF to have a material impact on our
financial statement presentation.

     In November 2004, the EITF reached a consensus in Issue No. 03-13,
"Applying the conditions in Par. 42 of SFAS 144, in determining whether to
report discontinued operations". The consensus provides that
classification of a disposed component as a discontinued operation is
appropriate only if the entity does not have continuing direct cash flows
and does not retain an interest, contract, or other arrangement sufficient
to enable it to exert significant influence over the disposed component's
operating and financial policies after the disposal transaction. We do not
expect this consensus to have a material impact on our financial
statements.





















                                    8


<PAGE>
NOTE 2 - INVENTORIES:

     Our inventories consist of the following:

<TABLE>
<CAPTION>
                                      September 30, 2005    December 31, 2004
                                      ------------------    -----------------
                                                    (In thousands)
<S>                                         <C>                <C>
First-in, first-out ("FIFO") method:
  Crude oil............................     $ 77,544           $ 44,435
  Refined products.....................      113,584             68,863
  Refinery and shop supplies...........       13,186             12,330
  Merchandise..........................        6,544              3,092
Retail method:
  Merchandise..........................        8,895              9,419
                                            --------           --------
    Subtotal...........................      219,753            138,139
Adjustment for last-in,
  first-out ("LIFO") method............      (89,645)           (44,639)
                                            --------           --------
    Total..............................     $130,108           $ 93,500
                                            ========           ========
</TABLE>

     The portion of inventories valued on a LIFO basis totaled $81,301,000
and $63,956,000 at September 30, 2005 and December 31, 2004, respectively.
The information in the following paragraph 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, 2005 and 2004, net earnings and diluted earnings per share would have
been higher as follows:

<TABLE>
<CAPTION>
                                   Three Months Ended    Nine Months Ended
                                     September 30,         September 30,
                                   ------------------    ------------------
                                     2005       2004       2005       2004
                                   -------    -------    -------    -------
                                     (In thousands, except per share data)
<S>                                <C>        <C>        <C>        <C>
Net earnings...................    $ 14,285   $11,404    $ 26,531   $23,934
Diluted earnings per share.....    $   1.04   $  0.91    $   1.99   $  2.18
</TABLE>







                                    9


<PAGE>
     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 first and third quarters of 2004, we liquidated certain lower
cost refining crude oil LIFO inventory layers, which resulted in an increase
in our net earnings and related diluted earnings per share as follows:

<TABLE>
<CAPTION>
                                   Three Months Ended    Nine Months Ended
                                   September 30, 2004    September 30, 2004
                                   ------------------    ------------------
                                     (In thousands, except per share data)
<S>                                      <C>                  <C>
Net earnings....................         $ 2,062              $ 2,617
Diluted earnings per share......         $  0.16              $  0.24
</TABLE>

     The LIFO layers that were liquidated were deemed to be a permanent
liquidation. There were no LIFO layers liquidated in the first nine months
of 2005.






























                                    10


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

     At September 30, 2005 and December 31, 2004, we had goodwill of
$50,592,000 and $40,303,000, respectively.

     The changes in the carrying amount of goodwill for the nine months
ended September 30, 2005 are as follows:

<TABLE>
<CAPTION>
                                         Refining    Retail       Wholesale
                                          Group      Group          Group           Total
                                         --------   -------   -----------------    -------
                                                              Phoenix    Dial
                                                               Fuel       Oil
                                                              -------   -------
                                                        (In thousands)
<S>                                      <C>        <C>       <C>       <C>        <C>
Balance as of January 1, 2005..........  $21,153    $ 4,414   $14,736   $     -   $40,303
Goodwill associated with
  Dial Oil purchase*...................        -          -         -    10,289    10,289
                                         -------    -------   -------   -------   -------
Balance as of September 30, 2005.......  $21,153    $ 4,414   $14,736   $10,289   $50,592
                                         =======    =======   =======   =======   =======
</TABLE>

     *See Note 11, "Acquisitions" for additional information regarding the
purchase of Dial Oil Co ("Dial Oil").

     A summary of intangible assets that are included in "Other Assets" in
the Condensed Consolidated Balance Sheets at September 30, 2005 and
December 31, 2004 is presented below:

<TABLE>
<CAPTION>
                                                 September 30, 2005                    December 31, 2004
                                       ------------------------------------   ------------------------------------
                                         Gross                        Net       Gross                        Net
                                       Carrying     Accumulated    Carrying   Carrying     Accumulated    Carrying
                                         Value      Amortization     Value      Value      Amortization     Value
                                       --------     ------------   --------   --------     ------------   --------
                                                                      (In thousands)
<S>                                     <C>           <C>          <C>         <C>           <C>          <C>
Amortized intangible assets:
  Rights-of-way.....................    $ 3,696       $ 2,829      $   867     $ 3,630       $ 2,708      $   922
  Contracts.........................      1,376         1,198          178       1,367         1,109          258
  Licenses and permits..............      1,214           489          725       1,096           379          717
                                        -------       -------      -------     -------       -------      -------
                                          6,286         4,516        1,770       6,093         4,196        1,897
                                        -------       -------      -------     -------       -------      -------
Unamortized intangible assets:
  Liquor licenses...................      8,335             -        8,335       7,315             -        7,315
                                        -------       -------      -------     -------       -------      -------
Total intangible assets.............    $14,621       $ 4,516      $10,105     $13,408       $ 4,196      $ 9,212
                                        =======       =======      =======     =======       =======      =======
</TABLE>

                                    11


<PAGE>
     Intangible asset amortization expense for the three and nine months
ended September 30, 2005 was approximately $121,000 and $320,000,
respectively. Intangible asset amortization expense for the three and nine
months ended September 30, 2004 was $98,000 and $303,000, respectively.
Estimated amortization expense for the rest of this fiscal year and the
next five fiscal years is as follows:

             2005 Remainder....................     $102,000
             2006..............................      412,000
             2007..............................      263,000
             2008..............................      221,000
             2009..............................      219,000
             2010..............................       94,000










































                                    12


<PAGE>
NOTE 4 - DISCONTINUED OPERATIONS AND ASSET DISPOSALS:

     The following table contains information regarding our discontinued
operations, all of which are included in our retail group.
<TABLE>
<CAPTION>
                                         Three Months Ended   Nine Months Ended
                                            September 30,        September 30,
                                         ------------------   -----------------
                                           2005     2004       2005      2004
                                          ------   ------     ------   -------
                                                      (In thousands)
<S>                                       <C>      <C>        <C>      <C>
Net revenues...........................   $    -   $  (10)    $    -   $ 1,267
                                          ------   ------     ------   -------
Net operating income/(loss)............   $    -   $  (17)    $    2   $  (196)
Gain on disposal.......................   $    -   $  161     $   22   $   533
Impairment and other write-downs.......   $    -   $ (125)    $    -   $  (497)
                                          ------   ------     ------   -------
Gain/(loss) before income taxes........   $    -   $   19     $   24   $  (160)
                                          ------   ------     ------   -------
Net earnings/(loss)....................   $    -   $   12     $   15   $   (99)
</TABLE>

     During the first half of 2005, we sold a piece of vacant land for
approximately $1,714,000 and recorded a gain on sale of approximately
$118,000. In the third quarter of 2005, we sold a piece of land that was
part of one of our stores to the State of New Mexico for approximately
$85,000 and recorded a gain on sale of approximately $52,000.

     In the first half of 2005, we sold a closed store for approximately
$149,000 and recorded a gain on sale of approximately $22,000.

     In the third quarter of 2005, we also recorded an impairment loss of
$1,284,000 on certain refinery assets that we significantly changed the
extent to which these assets were to be used.



















                                    13


<PAGE>
NOTE 5 - ASSET RETIREMENT OBLIGATIONS:

     SFAS No. 143, "Accounting for Asset Retirement Obligations",
addresses financial accounting and reporting obligations associated with
the retirement of tangible long-lived assets and the associated asset
retirement costs. 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. Our legally
restricted assets that are set aside for purposes of settling ARO
liabilities are approximately $336,000 as of September 30, 2005. These
assets are set aside to fund costs associated with the closure of certain
solid waste management facilities.

     In March 2005, the FASB issued Interpretation 47, "Accounting for
Conditional Asset Retirement Obligations" (FIN 47). This interpretation
clarifies the term conditional asset retirement obligation as used in SFAS
No. 143. Conditional asset retirement obligation refers to a legal
obligation to perform an asset retirement activity in which the timing
and/or method of settlement are conditional on a future event that may or
may not be within the control of the entity.  Accordingly, an entity is
required to recognize a liability for the fair value of a conditional
asset retirement obligation if the fair value of the liability can be
reasonably estimated.  Clarity is also provided regarding when an entity
would have sufficient information to reasonably estimate the fair value of
an asset retirement obligation. We believe that this interpretation will
not have a material impact on our financial statements. In addition, we
continue to monitor our operations for potential FIN 47 issues.  FIN 47 is
to be applied no later than the end of fiscal years ending after December
15, 2005.

     We have identified the following ARO's:

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

     2.   Crude Pipelines - our 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. We do not believe these right-of-way agreements will require us
to remove the underground pipe upon taking the pipeline permanently out of
service. Regulatory requirements, however, may mandate that such out-of-
service underground pipelines be purged.

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



                                    14


<PAGE>
     The following table reconciles the beginning and ending aggregate
carrying amount of our ARO's for the nine months ended September 30, 2005
and the year ended December 31, 2004.

<TABLE>
<CAPTION>
                                         September 30,    December 31,
                                             2005             2004
                                         -------------    ------------
                                                 (In thousands)
<S>                                        <C>               <C>
Liability beginning of year...........     $2,272            $2,223
Liabilities incurred..................        109                57
Liabilities settled...................        (82)             (259)
Accretion expense.....................        211               251
                                           ------            ------
Liability end of period...............     $2,510            $2,272
                                           ======            ======
</TABLE>

     Our ARO's are recorded in "Other Liabilities and Deferred Income" on
our Condensed Consolidated Balance Sheets.

































                                    15


<PAGE>
NOTE 6 - LONG-TERM DEBT:

     Our long-term debt consisted of the following:

<TABLE>
<CAPTION>
                                                         September 30,    December 31,
                                                             2005             2004
                                                         -------------    ------------
                                                                  (In thousands)
<S>                                                        <C>              <C>
11% senior subordinated notes, due 2012, net of
  unamortized discount of $2,958 and $3,635,
  interest payable semi-annually.....................      $127,043         $145,194
8% senior subordinated notes, due 2014, net of
  unamortized discount of $2,301 and $2,435,
  interest payable semi-annually.....................       147,699          147,565
                                                           --------         --------
  Total                                                    $274,742         $292,759
                                                           ========         ========
</TABLE>

     In March 2005, we issued 1,000,000 shares of our common stock and
received approximately $22,349,000, net of expenses. On May 5, 2005, we
used $21,905,000 of these proceeds to redeem approximately $18,828,000 of
our outstanding 11% senior subordinated notes. The amount paid to redeem
the notes included interest of $978,000 to the date of redemption (May 5,
2005) and redemption costs of $2,099,000.

     Repayment of both the 11% and 8% senior subordinated notes
(collectively, the "notes") is jointly and severally guaranteed on an
unconditional basis by our 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 our
subsidiaries to transfer funds to us 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 us in certain circumstances.

     The indentures governing the notes contain restrictive covenants
that, among other things, restrict our ability to:

     -  create liens;
     -  incur or guarantee debt;
     -  pay dividends;
     -  repurchase shares of our common stock;
     -  sell certain assets or subsidiary stock;
     -  engage in certain mergers;
     -  engage in certain transactions with affiliates; or
     -  alter our current line of business.




                                    16


<PAGE>
     In addition, subject to certain conditions, we are obligated to offer
to repurchase a portion of the notes at a price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the
date of repurchase, with the net cash proceeds of certain sales or other
dispositions of assets. Upon a change of control, we would be required to
offer to repurchase all of the notes at 101% of the principal amount
thereof, plus accrued interest, if any, to the date of purchase. At
September 30, 2005, retained earnings available for dividends under the
most restrictive terms of the indentures were approximately $65,138,000.

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

     On June 27, 2005, we amended and restated our revolving credit
facility (the "Credit Facility"). The Credit Facility is a $175,000,000
revolving credit facility and is for, among other things, working capital,
acquisitions, and other general corporate purposes.

     The interest rate applicable to the Credit Facility is based on
various short-term indices. At September 30, 2005, this rate was
approximately 5.7% per annum. We are required to pay a quarterly
commitment fee of between .25% and .50% of the unused amount of the
facility depending on our ratio of total debt to EBITDA (as defined in the
Credit Facility).

     Under the new Credit Facility, our existing borrowing costs are
reduced, certain of the covenants have been eased, and the term was
extended to 2010. The availability of funds under this facility is the
lesser of (i) $175,000,000, or (ii) the amount determined under a
borrowing base calculation tied to eligible accounts receivable and
inventories. We also have options to increase the size of the facility to
up to $250,000,000.

     At September 30, 2005, there were no direct borrowings outstanding
under the Credit Facility. At September 30, 2005, there were, however,
$8,379,000 of irrevocable letters of credit outstanding, primarily to
crude oil suppliers, insurance companies, and regulatory agencies. At
December 31, 2004, there were no direct borrowings and $12,068,000 of
irrevocable letters of credit outstanding primarily to crude oil
suppliers, insurance companies, and regulatory agencies.

     The obligations under the Credit Facility are guaranteed by each of
our principal subsidiaries and secured by a security interest in our
personal property, including:






                                    17


<PAGE>
     - accounts receivable;
     - inventory;
     - contracts;
     - chattel paper;
     - trademarks;
     - copyrights;
     - patents;
     - license rights;
     - deposits; and
     - investment accounts and general intangibles.

     The Credit Facility contains negative covenants limiting, among other
things, our ability to:

     - incur additional indebtedness;
     - create liens;
     - dispose of assets;
     - consolidate or merge;
     - make loans and investments;
     - enter into transactions with affiliates;
     - use loan proceeds for certain purposes;
     - guarantee obligations and incur contingent obligations;
     - enter into agreements restricting the ability of subsidiaries to
       pay dividends to us;
     - make distributions or stock repurchases;
     - make significant changes in accounting practices or change our
       fiscal year; and
     - prepay or modify subordinated indebtedness.

     The Credit Facility also requires us to meet certain financial
covenants, including maintaining a minimum consolidated net worth, a
minimum consolidated interest coverage ratio, and a maximum consolidated
funded indebtedness to total capitalization percentage.

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
















                                    18


<PAGE>
NOTE 7 - PENSION AND POST-RETIREMENT BENEFITS:

     The components of the Net Periodic Benefit Cost are as follows:

<TABLE>
<CAPTION>
                                                             Yorktown
                                                        Cash Balance Plan
                                          -----------------------------------------------
                                            Three Months Ended        Nine Months Ended
                                               September 30,            September 30,
                                          ----------------------   ----------------------
                                            2005         2004        2005         2004
                                          ---------    ---------   ---------    ---------
<S>                                       <C>          <C>         <C>          <C>
Service cost...........................   $ 339,000    $ 345,000   $1,017,000   $1,035,000
Interest cost..........................     168,000      135,000      504,000      403,000
Expected return on plan assets.........     (69,000)     (29,000)    (208,000)     (86,000)
Amortization of prior service cost.....     (27,000)           -      (80,000)           -
Amortization of net loss...............      15,000            -       45,000            -
                                          ---------    ---------   ----------   ----------
Net Periodic Benefit Cost..............   $ 426,000    $ 451,000   $1,278,000   $1,352,000
                                          =========    =========   ==========   ==========
</TABLE>

<TABLE>
<CAPTION>
                                                             Yorktown
                                                       Retiree Medical Plan
                                          -----------------------------------------------
                                            Three Months Ended        Nine Months Ended
                                               September 30,            September 30,
                                          ----------------------   ----------------------
                                            2005         2004        2005         2004
                                          ---------    ---------   ---------    ---------
<S>                                       <C>          <C>         <C>          <C>
Service cost...........................   $  55,000     $ 52,000   $ 165,000    $ 156,000
Interest cost..........................      55,000       49,000     165,000      146,000
Expected return on plan assets.........           -            -           -            -
Amortization of prior service costs....           -            -           -            -
Amortization of net loss...............       4,000        4,000      12,000       13,000
                                          ---------    ---------   ---------    ---------
Net Periodic Benefit Cost..............   $ 114,000    $ 105,000   $ 342,000    $ 315,000
                                          =========    =========   =========    =========
</TABLE>

     In September 2005, we made a cash contribution of $2,039,000 to the
Cash Balance Plan for the 2004 plan year.







                                    19


<PAGE>
NOTE 8 - 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,
                                                    ---------------------  ---------------------
                                                       2005        2004       2005       2004
                                                    ----------  ---------  ----------  ---------
Numerator                                                          (In thousands)
<S>                                                 <C>         <C>        <C>         <C>
Earnings from continuing operations..............   $   46,640  $   5,975  $   77,236  $  15,592
Earnings/(loss) from discontinued operations.....            -         12          15        (99)
                                                    ----------  ---------  ----------  ---------
Net earnings.....................................   $   46,640  $   5,987  $   77,251  $  15,493
                                                    ==========  =========  ==========  =========
</TABLE>

<TABLE>
<CAPTION>
                                                     Three Months Ended      Nine Months Ended
                                                        September 30,          September 30,
                                                    ---------------------   ---------------------
                                                       2005        2004        2005       2004
                                                    ----------  ---------   ----------  ---------
Denominator
<S>                                                 <C>         <C>         <C>         <C>
Basic - weighted average shares outstanding......   13,611,847  12,242,994  13,137,526  10,693,386
Effect of dilutive stock options.................      174,937     253,210     187,160     267,298
                                                    ----------  ----------  ----------  ----------
Diluted - weighted average shares outstanding....   13,786,784  12,496,204  13,324,686  10,960,684
                                                    ==========  ==========  ==========  ==========
</TABLE>

<TABLE>
<CAPTION>
                                                     Three Months Ended      Nine Months Ended
                                                        September 30,          September 30,
                                                    ---------------------  ---------------------
                                                       2005        2004       2005       2004
                                                    ----------  ---------  ----------  ---------
Basic Earnings (Loss) Per Share
<S>                                                 <C>         <C>        <C>         <C>
Earnings from continuing operations..............   $     3.43  $    0.49  $     5.88  $    1.45
Loss from discontinued operations................            -          -           -      (0.01)
                                                    ----------  ---------  ----------  ---------
Net earnings.....................................   $     3.43  $    0.49  $     5.88  $    1.44
                                                    ==========  =========  ==========  =========
</TABLE>



                                    20


<PAGE>
<TABLE>
<CAPTION>
                                                     Three Months Ended      Nine Months Ended
                                                        September 30,          September 30,
                                                    ---------------------  ---------------------
                                                       2005        2004       2005       2004
                                                    ----------  ---------  ----------  ---------
Diluted Earnings (Loss) Per Share
<S>                                                 <C>         <C>        <C>         <C>
Earnings from continuing operations..............   $     3.38  $    0.48  $     5.80  $    1.42
Loss from discontinued operations................            -          -           -      (0.01)
                                                    ----------  ---------  ----------  ---------
Net earnings.....................................   $     3.38  $    0.48  $     5.80  $    1.41
                                                    ==========  =========  ==========  =========
</TABLE>

     In March 2005, we issued 1,000,000 shares of common stock. In April
2005, we contributed 34,196 newly issued shares of our common stock,
valued at $972,000, to our 401(k) plan as a discretionary contribution for
the year 2004.

     In September 2005, we issued 1,000,000 shares of our common stock and
received approximately $52,057,000, net of expenses. We intend to use the
proceeds for general corporate purposes, including to test and take other
actions required to place our recently acquired crude oil pipeline in
service, and for possible future acquisitions.

     In February 2004, we contributed 49,046 newly issued shares of our
common stock to our 401(k) plan as a discretionary contribution for the
year 2003.

























                                    21


<PAGE>
NOTE 9 - BUSINESS SEGMENTS:

     We are organized into three operating segments based on manufacturing
and marketing criteria. These segments are the refining group, the retail
group and the wholesale group (formerly known as Phoenix Fuel). A
description of each segment and its principal products follows:

REFINING GROUP

     Our refining group operates our Ciniza and Bloomfield refineries in
the Four Corners area of New Mexico and the Yorktown refinery in Virginia.
It also operates a crude oil gathering pipeline system in New Mexico, two
finished products distribution terminals, and a fleet of crude oil and
finished product trucks. Our three refineries make various grades of
gasoline, diesel fuel, and other products from crude oil, other
feedstocks, and blending components. We also acquire finished products
through exchange agreements and from various suppliers. We sell these
products through our service stations, independent wholesalers and
retailers, commercial accounts, and sales and exchanges with major oil
companies. We purchase crude oil, other feedstocks, and blending
components from various suppliers.

RETAIL GROUP

     Our retail group operates service stations, which include convenience
stores or kiosks. Our 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. Our
refining group or our wholesale group supplies the gasoline and diesel
fuel that our retail group sells. We purchase general merchandise and food
products from various suppliers. At September 30, 2005, our retail group
operated 124 service stations with convenience stores or kiosks.

WHOLESALE GROUP

     Our wholesale group consists of Phoenix Fuel and Dial Oil (See Note
11, "Acquisitions", for further information). Our wholesale group
primarily distributes commercial wholesale petroleum products. Our
wholesale group includes several lubricant and bulk petroleum distribution
plants, an unmanned fleet fueling operation, a bulk lubricant terminal
facility, a fleet of finished product and lubricant delivery trucks, and
12 service stations acquired in the Dial Oil acquisition. We purchase
petroleum fuels and lubricants from suppliers and to a lesser extent from
our refining group.

OTHER

     Our 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.





                                    22


<PAGE>
     Operating income for each segment consists of net revenues less cost
of products sold, operating expenses, depreciation and amortization, and
the segment's selling, general and administrative expenses. Cost of
products sold reflects current costs adjusted, where appropriate, for LIFO
and lower of cost or market inventory adjustments.

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

     Disclosures regarding our reportable segments with a reconciliation
to consolidated totals for the three and nine months ended September 30,
2005 and 2004, are presented below. The tables pertaining to the three and
nine months ended September 30, 2004 do not include the results of Dial
Oil.





































                                    23


<PAGE>
<TABLE>
<CAPTION>
                                                      As of and for the Three Months Ended September 30, 2005
                                            -------------------------------------------------------------------------
                                                                Wholesale Group
                                                                ---------------
                                            Refining   Retail   Phoenix    Dial             Reconciling
                                              Group    Group      Fuel     Oil      Other      Items     Consolidated
                                            -------------------------------------------------------------------------
                                                                     (In thousands)
<S>                                         <C>       <C>       <C>       <C>       <C>        <C>          <C>
Customer net revenues:
  Finished products:
    Four Corners operations..............   $158,251
    Yorktown operations..................    483,941
                                            --------
      Total..............................    642,192    95,335   231,136    52,254         -          -     1,020,917
  Merchandise and lubricants.............          -    38,286     8,816     8,560         -          -        55,662
  Other..................................      3,520     3,893       499       667        67          -         8,646
                                            --------  --------  --------  --------  --------   --------     ---------
      Total..............................    645,712   137,514   240,451    61,481        67          -     1,085,225
                                            --------  --------  --------  --------  --------   --------     ---------
Intersegment net revenues:
  Finished products......................     95,704         -    21,978         -         -   (117,682)            -
  Merchandise and lubricants.............          -         -         -        14         -        (14)            -
  Other..................................      5,026         -        33        94         -     (5,153)            -
                                            --------  --------  --------  --------  --------   --------     ---------
      Total..............................    100,730         -    22,011       108         -   (122,849)            -
                                            --------  --------  --------  --------  --------   --------     ---------
Total net revenues.......................    746,442   137,514   262,462    61,589        67   (122,849)    1,085,225
Less net revenues of discontinued
  operations.............................          -         -         -         -         -          -             -
                                            --------  --------  --------  --------  --------   --------     ---------
Net revenues of continuing operations....    746,442   137,514   262,462    61,589        67   (122,849)    1,085,225
                                            ========  ========  ========  ========  ========   ========     =========


                                                         24


<PAGE>
                                                      As of and for the Three Months Ended September 30, 2005
                                            -------------------------------------------------------------------------
                                                                Wholesale Group
                                                                ---------------
                                            Refining   Retail   Phoenix    Dial             Reconciling
                                              Group    Group      Fuel     Oil      Other      Items     Consolidated
                                            -------------------------------------------------------------------------
                                                                     (In thousands)
Operating income (loss):
  Four Corners operations................   $ 32,968
  Yorktown operations....................     52,288
                                            --------
      Total operating income (loss)
        before corporate allocation......   $ 85,256     3,804     6,641     1,509   (11,698)    (1,055)       84,457
Corporate allocation.....................     (6,073)   (3,820)   (1,120)     (184)   11,197          -             -
                                            --------  --------  --------  --------  --------   --------     ---------
Total operating income (loss) after
  corporate allocation...................     79,183       (16)    5,521     1,325      (501)    (1,055)       84,457
Discontinued operations (gain) loss......          -         -         -         -         -          -             -
                                            --------  --------  --------  --------  --------   --------     ---------
  Operating income (loss) from
    continuing operations................   $ 79,183       (16)    5,521     1,325      (501)    (1,055)       84,457
                                            ========  ========  ========  ========  ========   ========     =========
Interest expense.........................                                                                      (5,783)
Costs associated with early
  debt extinguishment....................                                                                          17
Amortization and write-offs of
  financing costs........................                                                                        (398)
Interest and investment income...........                                                                         479
                                                                                                            ---------
Earnings from continuing operations
  before income taxes....................                                                                   $  78,772
                                                                                                            =========
Depreciation and amortization:
  Four Corners operations................   $  4,267
  Yorktown operations....................      2,653
                                            --------
      Total..............................   $  6,920     2,042       389       420       202          -         9,973
  Less discontinued operations...........          -         -         -         -         -          -             -
                                            --------  --------  --------  --------  --------   --------     ---------
  Continuing operations..................   $  6,920     2,042       389       420       202          -         9,973
                                            ========  ========  ========  ========  ========   ========     =========
Total assets.............................   $585,563   104,302   117,950    56,033   110,597          -       974,445
Capital expenditures.....................   $ 27,692     1,221       470        58       252          -        29,693


                                                         25
</TABLE>




<PAGE>
<TABLE>
<CAPTION>
                                                As of and for the Three Months Ended September 30, 2004**
                                            ----------------------------------------------------------------
                                            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..............   $116,983
    Yorktown operations..................    261,041
                                            --------
    Total................................   $378,024  $ 63,121  $149,543  $      -   $       -    $  590,688
  Merchandise and lubricants.............          -    36,276     8,393         -           -        44,669
  Other..................................      2,873     3,539       506       154           -         7,072
                                            --------  --------  --------  --------   ---------    ----------
    Total................................    380,897   102,936   158,442       154           -       642,429
                                            --------  --------  --------  --------   ---------    ----------
Intersegment net revenues:
  Finished products......................     50,653         -    14,883         -     (65,536)            -
  Other..................................      3,887         -         -         -      (3,887)            -
                                            --------  --------  --------  --------   ---------    ----------
    Total................................     54,540         -    14,883         -     (69,423)            -
                                            --------  --------  --------  --------   ---------    ----------
Total net revenues.......................    435,437   102,936   173,325       154     (69,423)      642,429
Less net revenues of discontinued
  operations.............................          -        10        -         -           -             10
                                            --------  --------  --------  --------   ---------    ----------
Net revenues of continuing operations....   $435,437  $102,946  $173,325  $    154   $ (69,423)   $  642,439
                                            ========  ========  ========  ========   =========    ==========
Operating income (loss):
  Four Corners operations................   $  8,150
  Yorktown operations....................     11,652
                                            --------
Total operating income (loss) before
  corporate allocation...................   $ 19,802  $  1,428  $  2,216  $ (6,879)  $   1,883    $   18,450
Corporate allocation.....................     (3,273)   (1,895)     (574)    5,742           -             -
                                            --------  --------  --------  --------   ---------    ----------
Total operating income (loss) after
  corporate allocation...................     16,529      (467)    1,642    (1,137)      1,883        18,450
Discontinued operations loss/(gain)......          -        17         -         -         (36)          (19)
                                            --------  --------  --------  --------   ---------    ----------
Operating income (loss)
  from continuing operations.............   $ 16,529  $   (450) $  1,642  $ (1,137)  $   1,847        18,431
                                            ========  ========  ========  ========   =========
Interest expense.........................                                                             (7,173)
Amortization and write-offs of
  financing costs........................                                                             (1,012)
Interest income..........................                                                                 57
                                                                                                  ----------
Earnings from continuing operations
  before income taxes....................                                                         $   10,303
                                                                                                  ==========

                                                 26


<PAGE>
                                                As of and for the Three Months Ended September 30, 2004**
                                            ----------------------------------------------------------------
                                            Refining   Retail   Phoenix            Reconciling
                                              Group    Group      Fuel     Other      Items     Consolidated
                                            ----------------------------------------------------------------
                                                                     (In thousands)
Depreciation and amortization:
  Four Corners operations................   $  4,045
  Yorktown operations....................      2,275
                                            --------
    Total................................   $  6,320  $  2,119  $    380  $    211   $       -    $    9,030
    Less discontinued operations.........          -        (6)        -         -            -           (6)
                                            --------  --------  --------  --------   ---------    ----------
    Continuing operations................   $  6,320  $  2,113  $    380  $    211   $       -    $    9,024
                                            ========  ========  ========  ========   =========    ==========
Total assets.............................   $471,659  $107,278  $ 85,719  $ 50,328   $       -    $  714,984
Capital expenditures.....................   $ 16,438  $    919  $    500  $    135   $       -    $   17,992
Yorktown refinery acquisition
  contingent payment.....................   $  3,605  $      -  $      -  $      -   $       -    $    3,605

**Information does not include Dial Oil.



































                                                 27
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                                                       As of and for the Nine Months Ended September 30, 2005
                                            -------------------------------------------------------------------------
                                                                Wholesale Group
                                                                ---------------
                                            Refining   Retail   Phoenix    Dial             Reconciling
                                              Group    Group      Fuel     Oil      Other      Items     Consolidated
                                            -------------------------------------------------------------------------
                                                                     (In thousands)
<S>                                         <C>       <C>       <C>       <C>       <C>        <C>          <C>
Customer net revenues:
  Finished products:
    Four Corners operations.............. $  428,402
    Yorktown operations..................  1,193,325
                                           ---------
      Total..............................  1,621,727   235,463   584,940    52,254         -          -     2,494,384
  Merchandise and lubricants.............          -   105,898    27,466     8,560         -          -       141,924
  Other..................................      9,415    11,952     1,589       667       378          -        24,001
                                            --------  --------  --------  --------  --------   --------     ---------
      Total..............................  1,631,142   353,313   613,995    61,481       378          -     2,660,309
                                            --------  --------  --------  --------  --------   --------     ---------
Intersegment net revenues:
  Finished products......................    206,956         -    55,823         -         -   (262,779)            -
  Merchandise and lubricants.............          -         -         -        14         -        (14)            -
  Other..................................     14,491         -        33        94         -    (14,618)            -
                                            --------  --------  --------  --------  --------   --------     ---------
      Total..............................    221,447         -    55,856       108         -   (277,411)            -
                                            --------  --------  --------  --------  --------   --------     ---------
Total net revenues.......................  1,852,589   353,313   669,851    61,589       378   (277,411)    2,660,309
Less net revenues of discontinued
  operations.............................          -         -         -         -         -          -             -
                                            --------  --------  --------  --------  --------   --------     ---------
Net revenues of continuing operations....  1,852,589   353,313   669,851    61,859       378   (277,411)    2,660,309
                                            ========  ========  ========  ========  ========   ========     =========





                                                         28


<PAGE>
                                                       As of and for the Nine Months Ended September 30, 2005
                                            -------------------------------------------------------------------------
                                                                Wholesale Group
                                                                ---------------
                                            Refining   Retail   Phoenix    Dial             Reconciling
                                              Group    Group      Fuel     Oil      Other      Items     Consolidated
                                            -------------------------------------------------------------------------
                                                                     (In thousands)
Operating income (loss):
  Four Corners operations................   $ 58,978
  Yorktown operations....................     97,250
                                            --------
      Total operating income (loss)
        before corporate allocation......   $156,228     5,239    13,155     1,509   (25,298)     2,875       153,708
Corporate allocation.....................    (13,184)   (7,918)   (2,442)     (184)   23,728          -             -
                                            --------  --------  --------  --------  --------   --------     ---------
Total operating income (loss) after
  corporate allocation...................    143,044    (2,679)   10,713     1,325    (1,570)     2,875       153,708
Discontinued operations (gain) loss......          -        (2)        -         -         -        (22)          (24)
                                            --------  --------  --------  --------  --------   --------     ---------
  Operating income (loss) from
    continuing operations................   $143,044    (2,681)   10,713     1,325    (1,570)     2,853       153,684
                                            ========  ========  ========  ========  ========   ========
Interest expense.........................                                                                     (19,159)
Costs associated with early
  debt extinguishment....................                                                                      (2,082)
Amortization and write-offs of
  financing costs........................                                                                      (2,398)
Interest and investment income...........                                                                         967
                                                                                                            ---------
Earnings from continuing operations
  before income taxes....................                                                                   $ 131,012
                                                                                                            =========
Depreciation and amortization:
  Four Corners operations................   $ 12,438
  Yorktown operations....................      7,949
                                            --------
      Total..............................   $ 20,387     7,779     1,275       420       574          -        30,435
  Less discontinued operations...........          -         -         -         -         -          -             -
                                            --------  --------  --------  --------  --------   --------     ---------
  Continuing operations..................   $ 20,387     7,779     1,275       420       574          -        30,435
                                            ========  ========  ========  ========  ========   ========     =========
Total assets.............................   $585,563   104,302   117,950    56,033   110,597          -       974,445
Capital expenditures.....................   $ 51,416     3,231     1,504        58     1,181          -        57,390


                                                         29
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                                                 As of and for the Nine Months Ended September 30, 2004**
                                            ----------------------------------------------------------------
                                            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..............   $  306,735
    Yorktown operations..................      784,587
                                            ----------
    Total................................   $1,091,322  $172,295  $427,261  $      -   $       -    $1,690,878
  Merchandise and lubricants.............            -   101,661    23,989         -           -       125,650
  Other..................................        8,934    11,171     1,430       486           -        22,021
                                            ----------  --------  --------  --------   ---------    ----------
    Total................................    1,100,256   285,127   452,680       486           -     1,838,549
                                            ----------  --------  --------  --------   ---------    ----------
Intersegment net revenues:
  Finished products......................      154,314         -    45,944         -    (200,258)            -
  Other..................................       11,653         -         -         -     (11,653)            -
                                            ----------  --------  --------  --------   ---------    ----------
    Total................................      165,967         -    45,944         -    (211,911)            -
                                            ----------  --------  --------  --------   ---------    ----------
Total net revenues.......................    1,266,223   285,127   498,624       486    (211,911)    1,838,549
Less net revenues of discontinued
  operations.............................            -    (1,267)        -         -           -        (1,267)
                                            ----------  --------  --------  --------   ---------    ----------
Net revenues of continuing operations....   $1,266,223  $283,860  $498,624  $    486   $(211,911)   $1,837,282
                                            ==========  ========  ========  ========   =========    ==========
Operating income (loss):
  Four Corners operations................   $   28,014
  Yorktown operations....................       47,899
                                            ----------
Total operating income (loss) before
  corporate allocation...................   $   75,913  $  5,030  $  7,290  $(19,402)  $   1,321    $   70,152
Corporate allocation.....................       (9,359)   (5,418)   (1,642)   16,419           -             -
                                            ----------  --------  --------  --------   ---------    ----------
Total operating income (loss) after
  corporate allocation...................       66,554      (388)    5,648    (2,983)      1,321        70,152
Discontinued operations loss/(gain)......            -       196         -         -         (36)          160
                                            ----------  --------  --------  --------   ---------    ----------
Operating income (loss)
  from continuing operations.............   $   66,554  $   (192) $  5,648  $ (2,983)  $   1,285        70,312
                                            ==========  ========  ========  ========   =========
Interest expense.........................                                                              (25,222)
Costs associated with early debt
  extinguishment.........................                                                              (10,875)
Amortization and write-offs of
  financing costs........................                                                               (7,827)
Interest income..........................                                                                  138
                                                                                                    ----------
Earnings from continuing operations
  before income taxes....................                                                           $   26,526
                                                                                                    ==========
                                                     30


<PAGE>
Depreciation and amortization:
  Four Corners operations................   $   12,120
  Yorktown operations....................        6,667
                                            ----------
    Total................................   $   18,787  $  6,792  $  1,204  $    647   $       -    $   27,430
    Less discontinued operations.........            -       (88)        -         -           -           (88)
                                            ----------  --------  --------  --------   ---------    ----------
    Continuing operations................   $   18,787  $  6,704  $  1,204  $    647   $       -    $   27,342
                                            ==========  ========  ========  ========   =========    ==========
Total assets.............................   $  471,659  $107,278  $ 85,719  $ 50,328   $       -    $  714,984
Capital expenditures.....................   $   36,673  $  1,616  $  1,293  $    260   $       -    $   39,842
Yorktown refinery acquisition
  contingent payment.....................   $   15,300  $      -  $      -  $      -   $       -    $   15,300

** Information does not include Dial Oil.









































                                                  31
</TABLE>


<PAGE>
NOTE 10 - COMMITMENTS AND CONTINGENCIES:

     We have various legal actions, claims, assessments and other
contingencies arising in the normal course of our business, including
those matters described below, pending against us. Some 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. We have recorded accruals for losses related to
those matters that we consider to be probable and that can be reasonably
estimated. We currently believe that any amounts exceeding our recorded
accruals should not materially affect our financial condition or
liquidity. It is possible, however, that the ultimate resolution of these
matters could result in a material adverse effect on our results of
operations.

     Federal, state and local laws relating to the environment, health and
safety affect nearly all of our operations. As is the case with all
companies engaged in similar industries, we face significant exposure from
actual or potential claims and lawsuits involving environmental matters.
These matters include soil and water contamination, air pollution and
personal injuries or property damage allegedly caused by substances made,
handled, used, released or disposed of by us or by our predecessors.

     Future expenditures related to environmental, health and safety
matters 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 us, and changing environmental, health and safety
laws, including changing interpretations of those laws.

ENVIRONMENTAL AND LITIGATION ACCRUALS

     As of September 30, 2005 and December 31, 2004, we had environmental
liability accruals of approximately $5,376,000 and $6,156,000,
respectively, which are summarized below, and litigation accruals in the
aggregate of $1,218,000 at September 30, 2005 and $525,000 at December 31,
2004. Environmental accruals are recorded in the current and long-term
sections of our Condensed Consolidated Balance Sheets. Litigation accruals
are recorded in the current section of our Condensed Consolidated Balance
Sheets.












                                    32


<PAGE>
<TABLE>
<CAPTION>
                       SUMMARY OF ACCRUED ENVIRONMENTAL CONTINGENCIES
                                      (In thousands)

                                            December 31,   Increase              September 30,
                                               2004       (Decrease)   Payments      2005
                                            ------------  ----------   --------  -------------
<S>                                          <C>           <C>          <C>         <C>
Yorktown Refinery.........................   $ 4,531       $   57       $ (787)     $ 3,801
Farmington Refinery.......................       570            -            -          570
Bloomfield Refinery.......................       251            -          (22)         229
Bloomfield - West Outfall.................        44            -          (44)           -
Bloomfield - River Terrace................         -          209          (67)         142
Bloomfield Tank Farm (Old Terminal).......        53            -           (8)          45
Ciniza - Solid Waste Management Units.....       274            -          (10)         264
Ciniza - Land Treatment Facility..........       186            -           (8)         178
Ciniza Well Closures......................       109            -         (109)           -
Retail Service Stations - Various.........       138          106         (163)          81
Other.....................................         -          211         (145)          66
                                             -------       ------       ------      -------
   Totals.................................   $ 6,156       $  583      $(1,363)     $ 5,376
                                             =======       ======       ======      =======
</TABLE>

      Approximately $4,787,000 of our environmental accrual is for the
following projects discussed below:

     - the remediation of the hydrocarbon plume that appears to extend no
       more than 1,800 feet south of our inactive Farmington refinery;
     - environmental obligations assumed in connection with our
       acquisitions of the Yorktown refinery and the Bloomfield
       refinery;
     - the remediation of hydrocarbon contamination discovered at the
       Bloomfield refinery after its purchase (the "West Outfall" and
       "River Terrace" contamination); and
     - hydrocarbon contamination on and adjacent to the 5.5 acres that we
       own in Bloomfield, New Mexico.

     The remaining amount of the accrual relates to the following:

     - closure of certain solid waste management units at the Ciniza
       refinery, which is being conducted in accordance with the
       refinery's Resource Conservation and Recovery Act permit;
     - closure of the Ciniza refinery land treatment facility including
       post-closure expenses; and
     - amounts for smaller remediation projects.







                                    33


<PAGE>
YORKTOWN ENVIRONMENTAL LIABILITIES

     We assumed certain liabilities and obligations in connection with our
purchase of the Yorktown refinery from BP Corporation North America Inc.
and BP Products North America Inc. (collectively "BP"). BP agreed to
reimburse us in specified amounts for some matters. Among other things,
and subject to certain exceptions, we assumed responsibility for all
costs, expenses, liabilities, and obligations under environmental, health
and safety laws caused by, arising from, incurred in connection with or
relating to the ownership of the refinery or its operation. We agreed to
reimburse BP for losses incurred in connection with or related to
liabilities and obligations assumed by us. Certain environmental matters
relating to the Yorktown refinery are discussed below.

YORKTOWN CONSENT DECREE

     Environmental obligations assumed by us include BP's responsibilities
relating to the Yorktown refinery under a consent decree among various
parties covering many locations (the "Consent Decree"). Parties to the
Consent Decree include the United States, BP Exploration and Oil Co.,
Amoco Oil Company, and Atlantic Richfield Company. We 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 nitrous oxides, sulfur
dioxide, and particulate matter emissions, and upgrades to the refinery's
leak detection and repair program. We estimate that we will incur capital
expenditures of between $20,000,000 and $27,000,000 to comply with the
Consent Decree through 2006, and have expended approximately $6,115,000 of
this amount through the third quarter of 2005. In addition, we estimate
that we will incur operating expenses associated with the requirements of
the Consent Decree of between $1,600,000 and $2,600,000 per year.

YORKTOWN 1991 ORDER

     In connection with the Yorktown acquisition, we also assumed BP's
obligations under an administrative order issued in 1991 by the
Environmental Protection Agency ("EPA") under the Resource Conservation and
Recovery Act ("RCRA"). The order requires an investigation of certain areas
of the refinery and the development of measures to correct any releases of
contaminants or hazardous substances found in these areas. A RCRA Facility
Investigation was conducted and approved conditionally by EPA in 2002.
Following the investigation, a Risk Assessment/Corrective Measures Study
("RA/CMS") was finalized in 2003, which summarized the remediation measures
agreed upon by us, EPA, and the Virginia Department of Environmental
Quality ("VDEQ"). The RA/CMS proposes 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 solid
materials associated with these measures. These proposed actions relate to
soil, sludge, and remediation wastes relating to 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 also are addressed in the RA/CMS.



                                    34


<PAGE>
     Based on the RA/CMS, EPA issued a proposed clean-up plan for public
comment in December 2003 setting forth preferred corrective measures for
remediating soil, groundwater, sediment, and surface water contamination
at the refinery. Following the public comment period, EPA issued its final
remedy decision and response to comments in April 2004. EPA currently is
developing the administrative consent order pursuant to which we will
implement our clean-up plan. Our most current estimate of expenses
associated with the order is between $24,000,000 and $26,000,000, and we
anticipate that these expenses will be incurred over a period of
approximately 35 years after EPA approves our clean-up plan. We believe
that approximately $9,600,000 of this amount will be incurred over an
initial four-year period, and additional expenditures of approximately
$7,700,000 will be incurred over the following four-year period, with the
remainder thereafter. EPA may require financial assurance of our ability
to perform the clean-up plan, such as depositing funds into a trust or
posting a letter of credit or performance bond. We may, however, be able
to receive reimbursement for some of the expenditures associated with the
plan due to the environmental reimbursement provisions included in our
purchase agreement with BP, as more fully discussed below.

     As part of the clean-up plan, the facility's underground sewer system
will be cleaned, inspected and repaired as needed. A portion of this sewer
work is scheduled to begin during the construction of the corrective
action management unit and related remediation work and is included in our
associated cost estimate. We anticipate that the balance of the sewer work
will cost from $1,500,000 to $3,500,000 over a period of three to five
years, beginning around the time the construction of the corrective action
management unit and related remediation work is nearing completion. We
anticipate that construction of the corrective action management unit and
related remediation work will be completed approximately five to seven
years after EPA approves our clean-up plan.

CLAIMS FOR REIMBURSEMENT FROM BP

     BP has agreed to reimburse us for all losses that are caused by or
relate to property damage caused by, or any environmental remediation
required due to, a violation of environmental, health and safety laws
during BP's operation of the refinery. In order to have a claim against
BP, however, the total of all our losses must exceed $5,000,000, in which
event our claim only relates to the amount exceeding $5,000,000. After
$5,000,000 is reached, our claim is limited to 50% of the amount by which
our losses exceed $5,000,000 until the total of all our losses exceeds
$10,000,000. After $10,000,000 is reached, our claim would be for 100% of
the amount by which our losses exceed $10,000,000. In applying these
provisions, losses amounting to a total of less than $250,000 arising out
of the same event are not added to 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 thresholds have been reached,
BP has no obligation to reimburse us for any losses amounting to a total






                                    35


<PAGE>
of less than $250,000 arising out of the same event. Except as specified
in the refinery purchase agreement, in order to seek reimbursement from
BP, we were required to notify BP of a claim within two years following
the closing date. Further, BP's total liability for reimbursement under
the refinery purchase agreement, including liability for environmental
claims, is limited to $35,000,000.

FARMINGTON REFINERY MATTERS

     In 1973, we constructed the Farmington refinery that we operated
until 1982. In 1985, we became aware of soil and shallow groundwater
contamination at this facility. Our environmental consulting firms
identified several areas of contamination in the soils and shallow
groundwater underlying the Farmington property. One of our consultants
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. Our remediation activities are ongoing under the
supervision of the New Mexico Oil Conservation Division ("OCD"), although
OCD has not issued a clean-up order.

BLOOMFIELD REFINERY ENVIRONMENTAL OBLIGATIONS

     In connection with the acquisition of the Bloomfield refinery, we
assumed certain environmental obligations including Bloomfield Refining
Company's ("BRC") obligations under an administrative order issued by EPA
in 1992 pursuant to RCRA. 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 New Mexico Environment
Department's ("NMED") Hazardous Waste Bureau ("HWB"). In December 2002,
HWB and OCD approved a clean-up plan for the refinery, subject to various
actions to be taken by us to implement the plan. We estimate that
remaining remediation expenses associated with the clean-up plan will be
approximately $229,000, and that these expenses will be incurred through
approximately 2018.

BLOOMFIELD REFINERY - WEST OUTFALL AND RIVER TERRACE

     In August 2004, hydrocarbon discharges were discovered seeping into
two small gullies, or draws, in an area of the Bloomfield refinery site
known as the west outfall. We took immediate containment and other
corrective actions, including removal of contaminated soils, construction
of lined collection sumps, and further investigation and monitoring. To
further remediate these discharges and prevent additional migration of
contamination, with OCD approval, we completed construction of an
underground barrier with a pollutant extraction and collection system in
the second quarter of 2005 at a cost of approximately $790,000.







                                    36


<PAGE>
     In connection with the underground barrier at the west outfall, OCD
required more investigation of elevated hydrocarbon levels in an area of
the Bloomfield refinery site known as the river terrace. With the approval
of OCD, we installed sheet piling in this area in 1999 to block migration
of groundwater contaminants. Monitoring wells were also installed, with
annual sampling results submitted to OCD. In August 2005, OCD approved a
bioventing plan to reduce hydrocarbon levels in this area. Bioventing
involves pumping air into the soil to stimulate bacterial activity, which
in turn consumes hydrocarbons. We estimate that remaining expenses
associated with the bioventing plan will be approximately $142,000, and
that these expenses will be incurred through the first half of 2006.

BLOOMFIELD REFINERY - OCD COMPLIANCE ORDER

     On September 19, 2005, we received an Administrative Compliance Order
from OCD alleging that: (1) we had failed to notify OCD of the west
outfall discharges at our Bloomfield refinery; (2) we had allowed
contaminants to enter the San Juan River from the refinery's river terrace
area; and (3) we had failed to comply with certain conditions of the
refinery's groundwater discharge permit. The Order seeks a civil penalty
of $120,000, and also specifies that we apply for a discharge permit
modification. We have already applied for and received the permit
modification, which requires us to prepare a comprehensive action plan for
the investigation and remediation of contaminated soil and groundwater at
the refinery. Until this plan is completed and approved by the two
agencies with regulatory oversight, OCD and HWB, we cannot reasonably
estimate the cost of any associated remediation activities. We are
continuing settlement discussions with OCD in connection with the Order.
As part of any settlement, we may be required to make further
modifications to our discharge permit.

BLOOMFIELD REFINERY - EPA COMPLIANCE ORDER

     On October 12, 2005, we received an Administrative Compliance Order
from EPA in connection with a 2000 Bloomfield refinery compliance
evaluation inspection and a follow-up inspection in early 2001. We send
waste water from the refinery's process units through an oil-water
separator, a series of aeration ponds that continue the treatment and
processing of oily water, and a series of evaporation ponds, before the
water is injected into a permitted deep well. EPA alleges that benzene
levels in the aeration ponds exceed permissible RCRA levels. EPA also
alleges that we failed to make a RCRA hazardous waste determination in
connection with waste water going into the aeration ponds. The Order seeks
a civil penalty of $890,000 in connection with this matter, but EPA has
indicated it would consider settling for a lesser amount if we commit to
operational changes that would reduce benzene levels in the aeration
ponds. As part of any settlement, we may be required to undertake one or
more environmentally beneficial projects known as supplemental
environmental projects. We are continuing settlement discussions with EPA.





                                    37


<PAGE>
BLOOMFIELD TANK FARM (OLD TERMINAL)

     We have discovered hydrocarbon contamination adjacent to a 55,000
barrel crude oil storage tank that was located in Bloomfield, New Mexico.
We believe that all or a portion of the tank and the 5.5 acres we own on
which the tank was located may have been a part of a refinery, owned by
various other parties, that, to our knowledge, ceased operations in the
early 1960s. We received approval to conduct a pilot bioventing project to
address remaining contamination at the site, which was completed in 2001.
Bioventing involves pumping air into the soil to stimulate bacterial
activity, which in turn consumes hydrocarbons. Based on the results of the
pilot project, we submitted a remediation plan to OCD proposing the use of
bioventing to address the remaining contamination. This remediation plan
was approved by OCD in 2002. We anticipate that we will incur
approximately $45,000 in expenses from 2005 through 2007 to continue
remediation, including groundwater monitoring and testing, until natural
attenuation has completed the process of groundwater remediation.

CONSENT AGREEMENTS AT FOUR CORNERS REFINERIES

     In June 2002, we received a draft compliance order from the 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, we 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, EPA informally told us that it also
intended to allege air quality violations in connection with the 2001
inspections at both refineries. In July 2005, we reached an administrative
settlement with NMED and EPA in the form of consent agreements.

     The administrative settlement resolves all alleged violations related
to the 2001 inspections. In August 2005, we paid fines of $100,000 to EPA
and $150,000 to NMED. We must also undertake certain environmentally
beneficial projects known as supplemental environmental projects at a cost
of up to $600,000.

     In addition, the administrative settlement is consistent with the
judicial consent decrees EPA has entered into with other refiners as part
of its national refinery enforcement program and requires that we do the
following:

     - implement controls to reduce emissions of nitrogen oxide, sulfur
       dioxide, and particulate matter from the largest emitting process
       units;
     - upgrade leak detection and repair practices;
     - minimize the number and severity of flaring events; and
     - adopt strategies to ensure continued compliance with benzene waste
       requirements.


                                    38


<PAGE>
     We currently believe that we can satisfy the requirements of the
settlement and the requirements of the national refinery enforcement
program by making equipment modifications to our Four Corners refineries,
which we estimate could cost approximately $20,000,000, spread over a
period of four to seven years following the date of the settlement. We
currently anticipate that the majority of these costs will be incurred in
the latter portion of the four to seven year phase-in period. In addition,
we estimate that on-going annual operating costs associated with these
modifications could cost approximately $4,000,000 per year. These amounts
are the currently estimated upper limits for both capital expenditures and
annual operating costs. Undertaking the upper limit for one type of
expenditure could result in our having to spend less than the upper limit
for the other. The costs associated with our settlement also could be
subject to reduction in the event of the temporary, partial or permanent
discontinuance of operations at one or both facilities.

JET FUEL CLAIM

     In February 2003, we filed a complaint against the United States
("U.S.") in the United States Court of Federal Claims related to military
jet fuel that we sold to the Defense Energy Support Center ("DESC") from
1983 through 1994. We asserted that the federal government underpaid for
the jet fuel by about $17,000,000. We requested that we be made whole in
connection with payments that were less than the fair market value of the
fuel, that we be reimbursed for the value of transporting the fuel in some
contracts, and that we be reimbursed for certain additional costs of
complying with the government's special requirements. The U.S. has said
that it may counterclaim and assert, based on its interpretation of the
contracts, that we owe additional amounts of between $2,100,000 and
$4,900,000. In the first quarter of 2004, the United States Court of
Appeals for the Federal Circuit agreed to hear appeals in other jet fuel
cases. In April 2005, a three judge panel of the Court of Appeals ruled in
favor of the U.S. The full Court of Appeals declined to reconsider this
decision. Our case has been stayed pending a possible appeal of that
decision to the U.S. Supreme Court. We are continuing to evaluate our
claims and monitor further developments in the appellate case. Based on
the current status of our claim, we have not recorded a receivable for
these claims or a liability for any potential counterclaim.

MTBE LITIGATION

     Lawsuits have been filed in numerous states alleging that MTBE, a
blendstock used by many refiners in producing specially formulated
gasoline, has contaminated water supplies. MTBE contamination primarily
results from leaking underground or aboveground storage tanks. The suits
allege MTBE contamination of water supplies owned and operated by the
plaintiffs, who are generally water providers or governmental entities.
The plaintiffs assert that numerous refiners, distributors, or sellers of
MTBE and/or gasoline containing MTBE are responsible for the






                                    39


<PAGE>
contamination. The plaintiffs also claim that the defendants are jointly
and severally liable for compensatory and punitive damages, costs, and
interest. Joint and several liability means that each defendant may be
liable for all of the damages even though that party was responsible for
only a small part of the damages. We are a defendant in approximately 30
of these MTBE lawsuits pending in Virginia, Connecticut, Massachusetts,
New Hampshire, New York, New Jersey, and Pennsylvania. We intend to
vigorously defend these lawsuits. Although it is possible that these
lawsuits may ultimately be decided against us, or otherwise adversely
affect us, a reasonable estimate of the amount of our potential liability,
if any, cannot be made at this time for various reasons. These reasons
include:

     - we anticipate that numerous parties are potentially responsible for
       the MTBE contamination alleged in these lawsuits; and
     - potentially applicable factual and legal issues have not been
       resolved.

CINIZA REFINERY INCIDENT

     A fire occurred in the alkylation unit at our Ciniza refinery on
April 8, 2004. This unit produces high octane blending stock for gasoline.
Emergency personnel responded immediately and contained the fire to the
alkylation unit, although there also was some damage to ancillary
equipment and to two adjacent units. Four of our employees were injured
and hospitalized, and all employees have since been released from the
hospital.

     On October 26, 2005, the U.S. Chemical Safety and Hazard
Investigation Board ("CSB") issued a case study of matters relating to the
fire. We do not agree with all of its findings. CSB does not have
authority to issue citations or any monetary fines.























                                    40


<PAGE>
NOTE 11 - ACQUISITIONS:

     On August 1, 2005, we acquired an idle crude oil pipeline running
from Jal, New Mexico to Bisti, New Mexico and related assets from Texas-
New Mexico Pipe Line Company. This pipeline is connected to our existing
pipeline network that directly supplies crude oil to the Bloomfield and
Ciniza refineries. Following the acquisition, we will test the pipeline
and take other actions related to placing it in service. Unless currently
unanticipated obstacles are encountered, we anticipate the pipeline will
become operational before the end of 2006.

     On July 12, 2005, we acquired 100% of the common shares of Dial Oil.
We funded this acquisition with cash on hand. Dial Oil is a wholesale
distributor of gasoline, diesel and lubricants in the Four Corners area of
the Southwest. Dial Oil also owns and operates 12 service
stations/convenience stores. Dial Oil's assets include bulk petroleum
distribution plants, cardlock fueling locations, and a fleet of truck
transports. The acquisition has been accounted for using the purchase
method of accounting whereby the total purchase price has been
preliminarily allocated to tangible and intangible assets acquired and
liabilities assumed based on the fair market values on the date of
acquisition. The pro forma effect of the acquisition on Giant's results of
operations is immaterial.
































                                    41


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

COMPANY OVERVIEW

     We refine and sell petroleum products and operate service stations
and convenience stores. Our operations are divided into three strategic
business units: the refining group, the retail group, and the wholesale
group (formerly known as Phoenix Fuel). The refining group operates two
refineries in the Four Corners area of New Mexico and one refinery in
Yorktown, Virginia. The refining group sells its products to wholesale
distributors and retail chains. Our retail group operated 124 service
stations at September 30, 2005. The retail group sells its petroleum
products and merchandise to consumers in New Mexico, Arizona and Southern
Colorado. The wholesale group distributes commercial wholesale petroleum
products primarily in Arizona and New Mexico and 12 service stations
acquired in the Dial Oil acquisition.

     Our strategy is to maintain and improve our financial performance. To
this end, we are focused on several critical and challenging objectives.
We will be addressing these objectives in the short-term as well as over
the next three to five years. In our view, the most important of these
objectives are:

     -  increasing margins through management of inventories and taking
        advantage of sales and purchasing opportunities;
     -  minimizing or reducing operating expenses and capital
        expenditures;
     -  increasing the available crude oil supply for our Four Corners
        refineries;
     -  cost effectively complying with current environmental regulations
        as they apply to our refineries, including future clean air
        standards;
     -  improving our overall financial health and flexibility by, among
        other things, reducing our debt and overall cost of capital,
        including our interest and financing costs, and maximizing our
        return on capital employed; and
     -  evaluating opportunities for internal growth and growth by
        acquisition.

CRITICAL ACCOUNTING POLICIES

     A critical step in the preparation of our financial statements is the
selection and application of accounting principles, policies, and
procedures that affect the amounts that we report. In order to apply these
principles, policies, and procedures, we 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 we may have little or no control over. In
addition, the methods used in applying the above may result in amounts





                                    42


<PAGE>
that differ considerably from those that would result from the application
of other acceptable methods. The development and selection of these
critical accounting policies, and the related disclosure below, have been
reviewed with the audit committee of our board of directors.

     Our significant accounting policies, including revenue recognition,
inventory valuation, and maintenance costs, are described in Note 1 to our
Consolidated Financial Statements included in our Annual Report on Form
10-K for the year ended December 31, 2004. The following accounting
policies are considered critical due to the uncertainties, judgments,
assumptions and estimates involved:

     -  accounting for contingencies, including environmental remediation
        and litigation liabilities;
     -  assessing the possible impairment of long-lived assets;
     -  accounting for asset retirement obligations;
     -  accounting for our pension and post-retirement benefit plans; and
     -  accounting for inventories.

     There have been no changes to these policies in 2005.

RESULTS OF OPERATIONS

     The following discussion of our Results of Operations should be read
in conjunction with the Consolidated Financial Statements and related
notes thereto included in Part I, Item 1 in this Form 10-Q, and in our
Annual Report on Form 10-K for the year ended December 31, 2004 in Item 8.




























                                    43


<PAGE>
     Below is operating data for our operations:

<TABLE>
<CAPTION>
                                                      Three Months Ended      Nine Months Ended
                                                         September 30,          September 30,
                                                    ---------------------   ---------------------
                                                       2005        2004        2005        2004
                                                    ---------   ---------   ---------   ---------
<S>                                                  <C>         <C>         <C>         <C>
Refining Group Operating Data:
  Four Corners Operations:
    Crude Oil/NGL Throughput (BPD)...........         29,867       29,271      29,500       28,010
    Refinery Sourced Sales Barrels (BPD).....         29,096       28,412      29,002       27,072
    Average Crude Oil Costs ($/Bbl)..........      $   60.59    $   40.99   $   53.30    $   36.60
    Refining Margins ($/Bbl).................      $   18.08    $    8.14   $   13.21    $    9.54
  Yorktown Operations:
    Crude Oil/NGL Throughput (BPD)...........         68,201       53,991      67,472       60,918
    Refinery Sourced Sales Barrels (BPD).....         70,936       53,585      68,430       62,391
    Average Crude Oil Costs ($/Bbl)..........      $   58.05    $   38.43   $   50.75    $   35.27
    Refining Margins ($/Bbl).................      $   11.25    $    6.01   $    8.52    $    5.93
Retail Group Operating Data:
(Continuing operations only)
  Fuel Gallons Sold (000's)..................         42,529       41,244     123,409      116,664
  Fuel Margins ($/gal).......................      $    0.21    $    0.18   $    0.16    $    0.18
  Merchandise Sales ($ in 000's).............      $  38,285    $  36,276   $ 105,898    $ 101,378
  Merchandise Margins........................             27%          20%         27%          23%
  Operating Retail Outlets at Period End.....            124          124         124          124
Wholesale Group Operating Data:
  Phoenix Fuel:
    Fuel Gallons Sold (000's)................        118,844      119,253     360,054      356,439
    Fuel Margins ($/gal).....................      $    0.08    $    0.05    $   0.07    $    0.05
    Lubricant Sales ($ in 000's).............      $   8,247    $   7,933   $  25,686    $  22,635
    Lubricant Margins........................             28%          13%         17%          13%
  Dial Oil**:
    Fuel Gallons Sold (000's)................         24,963            -      24,963            -
    Fuel Margins ($/gal).....................      $    0.12            -     $  0.12            -
    Lubricant Sales ($ in 000's).............      $   5,833            -    $  5,833            -
    Lubricant Margins........................             13%           -          13%           -
    Merchandise Sales ($ in 000's)...........      $   2,241            -    $  2,241            -
    Merchandise Margins*.....................             26%           -         26%            -
    Operating Retail Outlets at Period End...             12            -         12             -

*Includes only retail store merchandise sales.
**Statistics presented are from date July 12, 2005 date of acquisition.
</TABLE>









                                    44


<PAGE>
RECONCILIATIONS TO AMOUNTS REPORTED UNDER GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES

REFINING GROUP
--------------

Refining Margin
---------------

     Refining margin is the difference between average net sales prices
and average cost of products produced per refinery sourced sales barrel of
refined product. Refining margins for each of our refineries and all of
our refineries on a consolidated basis are calculated as shown below.

<TABLE>
<CAPTION>
                                                        Three Months Ended       Nine Months Ended
                                                           September 30,           September 30,
                                                        -------------------   -----------------------
                                                          2005       2004        2005         2004
                                                        --------   --------   ----------   ----------
<S>                                                     <C>        <C>        <C>          <C>
AVERAGE PER BARREL
------------------
Four Corners Operation
  Net sales...........................................  $  83.48   $  53.68   $    70.60   $    50.29
  Less cost of products...............................     65.40      45.54        57.39        40.75
                                                        --------   --------   ----------   ----------
  Refining margin.....................................  $  18.08   $   8.14   $    13.21   $     9.54
                                                        ========   ========   ==========   ==========
Yorktown Operation
  Net sales...........................................  $  72.52   $  47.67   $    61.42   $    43.45
  Less cost of products...............................     61.27      41.66        52.90        37.52
                                                        --------   --------   ----------   ----------
  Refining margin.....................................  $  11.25   $   6.01   $     8.52   $     5.93
                                                        ========   ========   ==========   ==========
Consolidated
  Net sales...........................................  $  75.71   $  49.75   $    64.15   $    45.52
  Less cost of products...............................     62.47      43.00        54.24        38.50
                                                        --------   --------   ----------   ----------
  Refining margin.....................................  $  13.24   $   6.75   $     9.91   $     7.02
                                                        ========   ========   ==========   ==========













                                    45


<PAGE>
                                                        Three Months Ended       Nine Months Ended
                                                           September 30,           September 30,
                                                        -------------------   -----------------------
                                                          2005       2004        2005         2004
                                                        --------   --------   ----------   ----------
Reconciliations of refined product sales from
produced products sold per barrel to net revenues

Four Corners Operations
  Average sales price per produced barrel sold........  $  83.48   $  53.68   $    70.60   $    50.29
  Times refinery sourced sales barrels per day........    29,096     28,412       29,002       27,072
  Times number of days in period......................        92         92          273          274
                                                        --------   --------   ----------   ----------
  Refined product sales from produced products
    Sold (000's)......................................  $223,462   $140,314   $  558,979   $  373,038
                                                        ========   ========   ==========   ==========
Yorktown Operations
  Average sales price per produced barrel sold........  $  72.52   $  47.67   $    61.42   $    43.45
  Times refinery sourced sales barrels per day........    70,936     53,585       68,430       62,391
  Times number of days in period......................        92         92          273          274
                                                        --------   --------   ----------   ----------
  Refined product sales from produced products
    Sold (000's)......................................  $473,274   $235,005   $1,147,411   $  742,784
                                                        ========   ========   ==========   ==========
Consolidated (000's)
  Sum of refined product sales from produced
    products sold*....................................  $696,736   $375,319   $1,706,390   $1,115,822
  Purchased product, Transportation and other revenues    49,706     60,118      146,199      150,401
                                                        --------   --------   ----------   ----------
  Net revenues........................................  $746,442   $435,437   $1,852,589   $1,266,223
                                                        ========   ========   ==========   ==========
*Includes inter-segment net revenues.
</TABLE>






















                                    46


<PAGE>
<TABLE>
<CAPTION>
                                                        Three Months Ended       Nine Months Ended
                                                           September 30,           September 30,
                                                        -------------------   -----------------------
                                                          2005       2004        2005         2004
                                                        --------   --------   ----------   ----------
<S>                                                     <C>        <C>        <C>          <C>
Reconciliation of average cost of products per
produced barrel sold to total cost of
products sold (excluding depreciation and amortization)

Four Corners Operations
  Average cost of products per produced barrel sold...  $  65.40   $  45.54   $    57.39   $    40.75
  Times refinery sourced sales barrels per day........    29,096     28,412       29,002       27,072
  Times number of days in period......................        92         92          273          274
                                                        --------   --------   ----------   ----------
  Cost of products for produced products
    Sold (000's)......................................  $175,065   $119,037   $  454,388   $  302,272
                                                        ========   ========   ==========   ==========

Yorktown Operations
  Average cost of products per produced barrel sold...  $  61.27   $  41.66   $    52.90   $    37.52
  Times refinery sourced sales barrels per day........    70,936     53,585       68,430       62,391
  Times number of days in period......................        92         92          273          274
                                                        --------   --------   ----------   ----------
  Cost of products for produced products
    Sold (000's)......................................  $399,855   $205,376   $  988,246   $  641,409
                                                        ========   ========   ==========   ==========

Consolidated (000's)
  Sum of refined cost of produced products sold.......  $574,920   $324,413   $1,442,634   $  943,681
  Purchased product, transportation and other  cost of
    products sold.....................................    41,174     53,588      121,835      130,778
                                                        --------   --------   ----------   ----------
  Total cost of products sold (excluding depreciation
  and amortization)...................................  $616,094   $378,001   $1,564,469   $1,074,459
                                                        ========   ========   ==========   ==========
</TABLE>
















                                    47


<PAGE>
RETAIL GROUP
------------

Fuel Margin
-----------
     Fuel margin is the difference between fuel sales less cost of fuel sales
divided by number of gallons sold.

<TABLE>
<CAPTION>
                                                        Three Months Ended       Nine Months Ended
                                                          September 30,            September 30,
                                                    -----------------------   -----------------------
                                                       2005         2004        2005         2004
                                                    ----------   ----------   ----------   ----------
(in 000's except fuel margin per gallon)
<S>                                                 <C>          <C>          <C>          <C>
Fuel sales........................................  $  110,975   $   78,445   $  281,469   $  213,438
Less cost of fuel sold............................     102,168       71,048      261,123      191,973
                                                    ----------   ----------   ----------   ----------
Fuel margin.......................................  $    8,807   $    7,397   $   20,346   $   21,465
Number of gallons sold............................      42,529       41,244      123,409      116,664
Fuel margin per gallon............................  $     0.21   $     0.18   $     0.16   $     0.18

Reconciliation of fuel sales to net revenues
(000's)

Fuel sales........................................  $  110,975   $   78,445   $  281,469   $  213,438
Excise taxes included in sales....................     (15,640)     (15,325)     (46,006)     (42,071)
                                                    ----------   ----------   ----------   ----------
Fuel sales, net of excise taxes...................      95,335       63,120      235,463      171,367
Merchandise sales.................................      38,285       36,276      105,898      101,378
Other sales.......................................       3,894        3,550       11,952       11,115
                                                    ----------   ----------   ----------   ----------
Net revenues......................................  $  137,514   $  102,946   $  353,313   $  283,860
                                                    ==========   ==========   ==========   ==========
Reconciliation of fuel cost of products sold to
total cost of products sold (excluding
depreciation and amortization) (000's)

Fuel cost of products sold........................  $  102,168   $   71,048   $  261,123   $  191,973
Excise taxes included in cost of products sold....     (15,640)     (15,325)     (46,006)     (42,071)
                                                    ----------   ----------   ----------   ----------
Fuel cost of products sold, net of excise taxes...      86,528       55,723      215,117      149,902
Merchandise cost of products sold.................      27,888       28,982       77,170       77,643
Other cost of products sold.......................       3,065        2,803        9,494        8,787
                                                    ----------   ----------   ----------   ----------
Total cost of products sold (excluding
  depreciation and amortization)..................  $  117,481   $   87,508   $  301,781   $  236,332
                                                    ==========   ==========   ==========   ==========
</TABLE>




                                    48


<PAGE>
WHOLESALE GROUP
---------------

Fuel Margin
-----------
     Fuel margin is the difference between fuel sales less cost of fuel sales
divided by number of gallons sold.

Phoenix Fuel
------------
<TABLE>
<CAPTION>
                                                        Three Months Ended       Nine Months Ended
                                                          September 30,            September 30,
                                                    -----------------------   -----------------------
                                                       2005         2004        2005         2004
                                                    ----------   ----------   ----------   ----------
(in 000's except fuel margin per gallon)
<S>                                                 <C>          <C>          <C>          <C>
Fuel sales........................................  $  286,471   $  206,048   $  760,266   $  595,312
Less cost of fuel sold............................     276,874      199,959      736,263      576,416
                                                    ----------   ----------   ----------   ----------
Fuel margin.......................................  $    9,597   $    6,089   $   24,003   $   18,896
Number of gallons sold............................     118,844      119,253      360,054      356,439
Fuel margin per gallon............................  $     0.08   $     0.05   $     0.07   $     0.05

Reconciliation of fuel sales to net revenues
(000's)

Fuel sales........................................  $  286,471   $  206,048   $  760,266   $  595,312
Excise taxes included in sales....................     (33,357)     (41,622)    (119,503)    (122,107)
                                                    ----------   ----------   ----------   ----------
Fuel sales, net of excise taxes...................     253,114      164,426      640,763      473,205
Lubricant sales...................................       8,247        7,933       25,686       22,635
Other sales.......................................       1,101          966        3,402        2,784
                                                    ----------   ----------   ----------   ----------
Net revenues......................................  $  262,462   $  173,325   $  669,851   $  498,624
                                                    ==========   ==========   ==========   ==========
Reconciliation of fuel cost of products sold to
total cost of products sold excluding
(depreciation and amortization) (000's)

Fuel cost of products sold........................  $  276,874   $  199,959   $  736,263   $  576,416
Excise taxes included in cost of products sold....     (33,357)     (41,622)    (119,503)    (122,107)
                                                    ----------   ----------   ----------   ----------
Fuel cost of products sold, net of excise taxes...     243,517      158,337      616,760      454,309
Lubricant cost of products sold...................       5,942        6,885       21,268       19,669
Other cost of products sold.......................         259          231          724          343
                                                    ----------   ----------   ----------   ----------
Total cost of products sold (excluding
  depreciation and amortization)..................  $  249,718   $  165,453   $  638,752   $  474,321
                                                    ==========   ==========   ==========   ==========
</TABLE>


                                    49


<PAGE>
Dial Oil(1),(2)
----------
<TABLE>
<CAPTION>
                                                        Three Months Ended       Nine Months Ended
                                                          September 30,            September 30,
                                                    -----------------------   -----------------------
                                                       2005         2004        2005         2004
                                                    ----------   ----------   ----------   ----------
(in 000's except fuel margin per gallon)
<S>                                                 <C>          <C>          <C>          <C>
Fuel sales........................................  $   52,254   $        -   $   52,254   $        -
Less cost of fuel sold............................      49,319            -       49,319            -
                                                    ----------   ----------   ----------   ----------
Fuel margin.......................................  $    2,935   $        -   $    2,935   $        -
Number of gallons sold............................      24,963            -       24,963            -
Fuel margin per gallon............................  $     0.12   $        -   $     0.12   $        -

Reconciliation of fuel sales to net revenues

Fuel sales........................................  $   52,254   $        -   $   52,254   $        -
Lubricant and merchandise sales...................       8,575            -        8,575            -
Other sales.......................................         760            -          760            -
                                                    ----------   ----------   ----------   ----------
Net revenues......................................  $   61,589   $        -   $   61,589   $        -
                                                    ==========   ==========   ==========   ==========
Reconciliation of cost of fuel sold to total
cost of products sold (excluding depreciation
and amortization)

Fuel cost of products sold,.......................  $   49,319   $        -   $   49,319   $        -
Lubricant and merchandise cost of products sold...       7,166            -        7,166            -
Other cost of products sold.......................           -            -            -            -
                                                    ----------   ----------   ----------   ----------
Total cost of products sold (excluding
  depreciation and amortization)..................  $   56,485   $        -   $   56,485   $        -
                                                    ==========   ==========   ==========   ==========

(1) Statistics presented are from July 13, 2005 to September 30, 2005.
(2) Dial Oil presents sales and cost of sales, net of excise taxes.
</TABLE>














                                    50


<PAGE>
<TABLE>
<CAPTION>
                                                        Three Months Ended       Nine Months Ended
                                                          September 30,            September 30,
                                                    -----------------------   -----------------------
                                                       2005         2004        2005         2004
                                                    ----------   ----------   ----------   ----------
<S>                                                 <C>          <C>          <C>          <C>
Consolidated
------------
Reconciliation to net revenues reported in
  Condensed Consolidated Statement of Earnings
  (000's)

Net revenues - Refinery Group.....................  $  746,442   $  435,437   $1,852,589   $1,266,223
Net revenues - Retail Group.......................     137,514      102,946      353,313      283,860
Net revenues - Wholesale Group:
   Net revenues - Phoenix Fuel....................     262,462      173,325      669,851      498,624
   Net revenues - Dial Oil........................      61,589            -       61,589            -
Net revenues - Other..............................          67          154          378          486
Eliminations......................................    (122,849)     (69,423)    (277,411)    (211,911)
                                                    ----------   ----------   ----------   ----------
Total net revenues reported in Condensed
  Consolidated Statement of Earnings                $1,085,225   $  642,439   $2,660,309   $1,837,282
                                                    ==========   ==========   ==========   ==========
Reconciliation to cost of products sold (excluding
  depreciation and amortization) in Condensed
Consolidated Statement of Earnings (000's)

Cost of products sold - Refinery Group
  (excluding depreciation and amortization).......  $  616,094   $  378,001   $1,564,469   $1,074,459
Cost of products sold - Retail Group
  (excluding depreciation and amortization).......     117,481       87,508      301,781      236,332
Cost of products sold - Wholesale Group:
  Cost of products sold - Phoenix Fuel
    (excluding depreciation and amortization).....     249,718      165,453      638,752      474,321
  Cost of products sold - Dial Oil
    (excluding depreciation and amortization).....      56,485            -       56,485            -
Eliminations......................................    (122,849)     (69,423)    (277,411)    (211,911)
Other.............................................       3,479        3,024       11,006        9,455
                                                    ----------   ----------   ----------   ----------
Total cost of products sold (excluding
  depreciation and amortization) reported in
  Condensed Consolidated Statement of Earnings      $  920,408   $  564,563   $2,295,082   $1,582,656
                                                    ==========   ==========   ==========   ==========
</TABLE>

     Our refining margin per barrel is calculated by subtracting cost of
products from net sales and dividing the result by the number of barrels
sold for the period. Our fuel margin per gallon is calculated by
subtracting cost of fuel sold from fuel sales and dividing the result by
the number of gallons sold for the period. We use refining margin per



                                    51


<PAGE>
barrel and fuel margin per gallon to evaluate performance, and allocate
resources. These measures may not be comparable to similarly titled
measures used by other companies.  Investors and analysts use these
financial measures to help analyze and compare companies in the industry
on the basis of operating performance.  These financial measures should
not be considered as alternatives to segment operating income, revenues,
costs of sales and operating expenses or any other measure of financial
performance presented in accordance with accounting principles generally
accepted in the United States of America.

     We believe the comparability of our continuing results of operations
for the three and nine months ended September 30, 2005 with the same
period in 2004 was affected by, among others, the following factors:

     -  stronger net refining margins for our Yorktown and Four Corners
        refineries in 2005, due to, among other things:

        -  increased sales in our Tier 1 market;
        -  reduced imports of foreign gasoline and gasoline blendstocks
           early in 2005, due to a reduction in gasoline sulfur limits;
        -  elimination of MTBE in Connecticut and New York;
        -  favorable margins due to tight finished product supply in certain
           of our market areas; and
        -  the processing of lower  acidic crude oil costs at our
           Yorktown refinery, including crude oil purchased under our
           supply agreement with Statoil that began deliveries in late
           February 2004;

     -  stronger fuel margins for our Phoenix Fuel operations, due to,
        among other things, tight finished product supply in our
        Phoenix market;
     -  lower fuel margins per gallon for our retail group for the nine
        months ended September 30, 2005; and
     -  stronger fuel margins per gallon for our retail group for the
        three months ended September 30, 2005.

     EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     Our earnings from continuing operations before income taxes increased
$68,469,000 for the three months ended September 30, 2005, compared to the
same period in 2004. This increase was primarily due to the following
factors:

     -  an increase in operating income before corporate allocations from
        our refinery operations of $65,454,000 primarily due to higher
        volumes and margins realized;
     -  an increase in Phoenix Fuel's operating income before corporate
        allocations of $4,425,000 primarily due to increased fuel margins
        per gallon sold; and
     -  the implementation of our debt reduction strategy that resulted in
        the following:
        - a $1,390,000 or 19% decrease in interest expense; and
        - a reduction of $614,000 in financing costs amortization.



                                    52


<PAGE>
     Our earnings from continuing operations before income taxes increased
$104,486,000 for the nine months ended September 30, 2005, compared to the
same period in 2004. This increase was primarily due to the following
factors:

     -  an increase in operating income before corporate allocations from
        our refinery operations of $80,315,000 primarily due to higher
        volumes and margins realized;
     -  an increase in Phoenix Fuel's operating income before corporate
        allocations of $5,865,000 primarily due to increased fuel margins
        per gallon sold; and
     -  the implementation of our debt reduction strategy that resulted in
        the following:
        - a $6,063,000 or 24% decrease in interest expense;
        - a decrease of $8,793,000 in non-recurring costs associated
          with early debt extinguishment; and
        - a reduction of $5,429,000 in financing costs amortization.

     This increase was offset by, among other things, the following:

     -  higher selling, general and administrative expenses as a result of
        higher management incentive accruals and additional expenses
        incurred in relation to our 401(k) plan.

     YORKTOWN REFINERY

     Our Yorktown refinery operated at an average throughput rate of
approximately 68,201 barrels per day in the third quarter of 2005 compared
to 53,991 barrels per day in the third quarter of 2004. For the nine
months ended September 30, 2005 and 2004, the average throughput rate was
67,472 and 60,918 barrels per day, respectively.

     Refining margins for the third quarter of 2005 were $11.25 per barrel
and were $6.01 for the third quarter of 2004. Refining margins for the
nine months ended September 30, 2005 and 2004 were $8.52 and $5.93 per
barrel, respectively.

     Revenues for our Yorktown refinery increased for the three and nine
months ended September 30, 2005 primarily due to higher finished product
prices as a result of favorable market conditions.

     Cost of products sold for our Yorktown refinery increased for the
three and nine months ended September 30, 2005 primarily due to higher
crude oil prices, as a result of global economic conditions.

     Operating expenses for our Yorktown refinery increased for the three
months ended September 30, 2005 due in part to the following:

     -  higher employee and maintenance costs to meet our processing
        needs;
     -  higher fuel and electricity costs; and
     -  higher chemical and catalyst costs, primarily due to additional
        costs required to meet more stringent sulfur reduction
        requirements.


                                    53


<PAGE>
     Operating expenses for our Yorktown refinery increased for the nine
months ended September 30, 2005 due in part to the following:

     -  higher purchased costs to meet our processing needs;
     -  higher fuel and electricity costs; and
     -  higher chemical and catalyst costs, primarily due to additional
        costs required to meet more stringent sulfur reduction
        requirements.

     Depreciation and amortization expense for our Yorktown refinery
increased for the three and nine months ended September 30, 2005 due in
part to the amortization of certain refinery turnaround costs and
depreciation of additional capitalized costs incurred in 2004.

     FOUR CORNERS REFINERIES

     Our Four Corners refineries operated at an average throughput rate of
approximately 29,867 barrels per day in the third quarter of 2005,
compared to 29,271 barrels per day in the third quarter of 2004. For the
nine months ended September 30, 2005 and 2004, the average throughput rate
was 29,500 and 28,010 barrels per day, respectively.

     Refining margins for the third quarter of 2005 were $18.08 per barrel
and were $8.14 for the third of 2004. Refining margins for the nine months
ended September 30, 2005 and 2004 were $13.21 and $9.54 per barrel,
respectively.

     Revenues for our Four Corners refineries increased for the three and
nine months ended September 30, 2005 primarily due to an increase in
finished product prices as a result of favorable market conditions and an
increase in volumes sold.

     Cost of products sold for our Four Corners refineries increased for the
three and nine months ended September 30, 2005 primarily due to higher
average crude oil costs as a result of global market conditions and an
increase in volumes sold.

     Operating expenses for our Four Corners refineries increased for the
three and nine months ended September 30, 2005 primarily due to higher
employee costs, fuel costs, and additional outside services incurred in
our operations.

     Depreciation and amortization expense for our Four Corners refineries
increased for the three and nine months ended September 30, 2005 due in
part to the amortization of certain refinery turnaround costs incurred in
2004.









                                    54


<PAGE>
     RETAIL GROUP

     Average fuel margins were $0.21 per gallon for the three months ended
September 30, 2005 as compared to $0.18 per gallon for the same period in
2004. Fuel volumes sold for the three months ended September 30, 2005
increased as compared to the same period a year ago due primarily to
favorable market conditions and improved demand over the same period in
2004. Average merchandise margins were 27% for the three months ended
September 30, 2005 as compared to 20% for the same period in 2004. The
increase in merchandise margins was due to, among other factors, lower
rebates in 2004.

     Average fuel margins were $0.16 per gallon for the nine months ended
September 30, 2005 as compared to $0.18 per gallon for the same period in
2004. Fuel volumes sold for the nine months ended September 30, 2005
increased as compared to the same period a year ago due primarily to
favorable market conditions and improved demand over the same period in
2004. Average merchandise margins were 27% for the nine months ended
September 30, 2005 as compared to 23% for the same period in 2004. The
increase in merchandise margins was primarily due to, among other factors,
lower rebates in 2004.

     Revenues for our retail group increased for the three and nine months
ended September 30, 2005, compared to the same periods in 2004 primarily
due to an increase in fuel selling prices and an increase in fuel volumes
sold.

     Cost of products sold for our retail group increased for the three
and nine months ended September 30, 2005, compared to the same periods in
2004 primarily due to an increase in finished product purchase prices as a
result of increased global demand and finished product volumes sold.

     Our retail fuel margin per gallon increased for the three months
ended September 30, 2005 due to higher finished product purchase prices as
a result of increased global demand.

     Our retail fuel margin per gallon decreased for the nine months ended
September 30, 2005 due to higher finished product purchase prices as a
result of increased global demand that could not be recovered in the
market.

     Operating expenses increased for the three and nine months ended
September 30, 2005 as compared with the same periods in 2004, primarily
due to an increase in bank charges and additional rent costs for the
periods in 2005 as compared to 2004.

     Depreciation expense increased for the nine months ended September
30, 2005 as compared to the same period in 2004 due to additional
amortization for our leasehold improvements.






                                    55


<PAGE>
     WHOLESALE GROUP

     Phoenix Fuel
     ------------

     Average gasoline and diesel fuel margins for Phoenix Fuel were $0.08
per gallon for the third quarter of 2005 and were $0.05 per gallon for the
third quarter of 2004. For the nine months ended September 30, 2005,
gasoline and fuel volumes increased as compared to the same period in
2004. Average gasoline and diesel fuel margins were $0.07 per gallon for
the nine months ended September 30, 2005 and were $0.05 per gallon for the
same period in 2004 primarily due to favorable market conditions.

     Revenues for Phoenix Fuel increased for the three and nine months
ended September 30, 2005 primarily due to higher average price per gallon
sold.

     Cost of products sold increased for the three and nine months ended
September 30, 2005 primarily due to an increase in finished product
purchase prices.

     Phoenix Fuel's finished product margins increased for the three and
nine months ended September 30, 2005 primarily as a result of favorable
market conditions.

     Operating expenses for Phoenix Fuel increased for the three and nine
months ended September 30, 2005 primarily due to higher transportation
costs.

     Dial Oil
     --------

     No comparative analysis is presented for Dial Oil because it was
acquired in the third quarter of 2005 and no prior period statistics are
included above.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A) FROM CONTINUING
     OPERATIONS

     For the three and nine months ended September 30, 2005, selling,
general and administrative expenses increased by approximately $5,321,000
and $6,710,000, respectively, primarily due to higher accruals for
management incentive bonuses associated with increased company financial
performance and additional expenses incurred in relation to our 401(k)
plan, but were partially offset by a reimbursement of legal expenses
incurred in previous periods.









                                    56


<PAGE>
     INTEREST EXPENSE FROM CONTINUING OPERATIONS

     For the three months ended September 30, 2005, interest expense
decreased approximately $1,390,000 or 19%. For the nine months ended
September 30, 2005, interest expense decreased approximately $6,063,000 or
24%.  These decreases were primarily due to a reduction in our long-term
debt, which was part of our debt reduction strategy implemented beginning
in 2002.

     INCOME TAXES FROM CONTINUING OPERATIONS

     The effective tax rates for the three months ended September 30, 2005
and 2004 were approximately 40.8% and 42.0%, respectively. The decrease
was primarily due to a reduction in effective state tax rates. The
effective tax rates for the nine months ended September 30, 2005 and 2004
were approximately 41.1% and 41.2%, respectively.

DISCONTINUED OPERATIONS

     Discontinued operations include the operations of some of our retail
service station/convenience stores. See Note 4 to our Condensed
Consolidated Financial Statements included in Part I, Item 1 for
additional information relating to these operations.

OUTLOOK

     Overall, we believe that our current refining fundamentals are more
positive now as compared to the same time last year. Same store fuel
margins and merchandise sales for our retail group are above the prior
year's levels, however, fuel volumes are lower. Phoenix Fuel currently
continues to see stronger margins and volumes are consistent with the same
time last year. Our businesses are, however, very volatile and there can
be no assurance that currently existing conditions will continue for any
of our business segments.

LIQUIDITY AND CAPITAL RESOURCES

     CAPITAL STRUCTURE

     At September 30, 2005, we had long-term debt of $274,742,000. At
December 31, 2004 we had long-term debt of $292,759,000. There was no
current portion of long-term debt outstanding at September 30, 2005 or at
December 31, 2004.

     The amount at September 30, 2005 includes:

     -  $150,000,000 before discount of 8% Senior Subordinated Notes due
        2014; and
     -  $130,000,000 before discount of 11% Senior Subordinated Notes due
        2012.





                                    57


<PAGE>
     The amount at December 31, 2004 includes:

     -  $150,000,000 before discount of 8% Senior Subordinated Notes due
        2014; and
     -  $148,828,000 before discount of 11% Senior Subordinated Notes due
        2012.

     On June 27, 2005, we amended and restated our revolving credit
facility (the "Credit Facility"). The Credit Facility is a $175,000,000
revolving credit facility and is for, among other things, working capital,
acquisitions, and other general corporate purposes.

     Under the new Credit Facility, our existing borrowing costs are
reduced, certain of the covenants have been eased, and the term was
extended to 2010. The availability of funds under this facility is the
lesser of (i) $175,000,000, or (ii) the amount determined under a
borrowing base calculation tied to eligible accounts receivable and
inventories. We also have options to increase the size of the facility to
up to $250,000,000.

     At September 30, 2005, our long-term debt was 42.6% of total capital.
At December 31, 2004, it was 57.5%. Our net debt (long-term debt less cash
and cash equivalents) to total net capitalization (long-term debt less
cash and cash equivalents plus total shareholders' equity) percentage at
September 30, 2005, was 32.2%. At December 31, 2004, this percentage was
55.4%.

     The indentures governing our notes and our credit facility contain
restrictive covenants and other terms and conditions that if not
maintained, if violated, or if certain conditions are met, could result in
default, affect our ability to borrow funds, make certain payments, or
engage in certain activities. A default under any of the notes or the
credit facility could cause such debt, and by reason of cross-default
provisions, our other debt to become immediately due and payable. If we
are unable to repay such amounts, the lenders under our credit facility
could proceed against the collateral granted to them to secure that debt.
If those lenders accelerate the payment of the credit facility, we cannot
provide assurance that our assets would be sufficient to pay that debt and
other debt or that we would be able to refinance such debt or borrow more
money on terms acceptable to us, if at all. Our ability to comply with the
covenants, and other terms and conditions, of the indentures and the
credit facility may be affected by many events beyond our control, and we
cannot provide assurance that our operating results will be sufficient to
allow us to comply with the covenants.

     We expect to be in compliance with the covenants going forward, and
we do not believe that any presently contemplated activities will be
constrained. A prolonged period of low refining margins, however, would
have a negative impact on our ability to borrow funds and to make
expenditures and would have an adverse impact on compliance with our debt
covenants.




                                    58


<PAGE>
     We presently have senior subordinated ratings of "B3" from Moody's
Investor Services and "B-" from Standard & Poor's.

     As discussed in Note 6 to our Condensed Consolidated Financial
Statements included in Part I, Item 1, we completed a refinancing of a
portion of our long-term debt. As part of the refinancing, we sold
1,000,000 shares of our common stock. The proceeds from this transaction
were used to reduce our long-term debt in the second quarter of 2005
through the redemption of a portion of our 11% senior subordinated notes.

     In September 2005, we issued 1,000,000 shares of our common stock and
received approximately $52,057,000, net of expenses. We intend to use the
proceeds for general corporate purposes, including to test and take other
actions required to place our recently acquired crude oil pipeline in
service, and for possible future acquisitions.

     CASH FLOW FROM OPERATIONS

     Our operating cash flow increased by $31,154,000 for the nine months
ended September 30, 2005 compared to the nine months ended September 30,
2004. This resulted primarily from an increase in net earnings for the
first nine months of 2005 as compared with the same period last year. Our
current cash balance is approximately $175,000,000.

     WORKING CAPITAL

     We anticipate that working capital, including that necessary for
capital expenditures and debt service, will be funded through existing
cash balances, cash generated from operating activities, existing credit
facilities, and, if necessary, future financing arrangements. 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. Based on the current operating environment for all of our
operations, we believe that we will have sufficient working capital to
meet our needs over the next 12-month period.

     Working capital at September 30, 2005 consisted of current assets of
$447,189,000 and current liabilities of $233,031,000 or a current ratio of
1.92:1. At December 31, 2004, the current ratio was 1.80:1, with current
assets of $232,005,000 and current liabilities of $128,833,000.

     CAPITAL EXPENDITURES AND RESOURCES

     During the third quarter of 2005, we increased our budget for capital
expenditures in 2005, excluding any potential acquisitions, from
approximately $99,000,000 to approximately $102,000,000, and then further
increased our budget to approximately $110,000,000. A portion of these
costs may not be spent in 2005. The increase is primarily related to
increased costs associated with work to be done at the Four Corners





                                    59


<PAGE>
refineries to comply with clean fuel regulations. Net cash used in
investing activities for purchases of property, plant and equipment
totaled approximately $48,390,000 (net of the Texas-New Mexico pipeline
discussed below) for the nine months ended September 30, 2005 and
$39,842,000 for the nine months ended September 30, 2004. Expenditures for
2005 primarily were for operational and environmental projects for the
refineries, Phoenix Fuel, and retail operations.

     On August 1, 2005, we acquired an idle crude oil pipeline running
from Jal, New Mexico to Bisti, New Mexico, and related assets from Texas-
New Mexico Pipe Line Company. We estimate that we will spend approximately
$2,500,000 to test the pipeline and otherwise determine how much it will
cost to place it in service. We currently estimate that these costs will
be approximately $15,000,000, including the previously mentioned
$2,500,000. The actual cost, however, could be considerably different as
our evaluation of the pipeline is at a very preliminary stage. Further,
our estimated cost of placing the pipeline in service does not include the
cost of crude oil that will be used to fill the pipeline, which is
currently empty.

     We received proceeds of approximately $2,213,000 from the sale of
property, plant and equipment and other assets in the first nine months of
2005 and $1,765,000 for the same period in 2004. We also received proceeds
of $1,948,000 in 2005 from the sale of one closed service
station/convenience store, a vacant piece of land and piece of land that
was part of a fully operational convenience store. In the first nine
months of 2004, we sold six stores and four pieces of land and received
$9,354,000 in proceeds from such sales.

     We continue to monitor and evaluate our assets and may sell
additional non-strategic or underperforming assets that we identify as
circumstances allow. We also continue to evaluate potential acquisitions
in our strategic markets, including lease arrangements.

     We continue to investigate other capital improvements to our existing
facilities. The amount of capital projects that are actually undertaken in
2005 will depend on, among other things, general business conditions and
results of operations.

     DIVIDENDS

     We currently do not pay dividends on our common stock. The board of
directors will periodically review our policy regarding the payment of
dividends. Any future dividends are subject to the results of our
operations, declaration by the board of directors, and existing debt
covenants.

     RISK MANAGEMENT

     We are exposed to various market risks, including changes in certain
commodity prices and interest rates. To manage these normal business
exposures, we may, from time to time, use commodity futures and options



                                    60


<PAGE>
contracts to reduce price volatility, to fix margins in our refining and
marketing operations, and to protect against price declines associated
with our crude oil and finished products inventories. Our policies for the
use of derivative financial instruments set limits on quantities, require
various levels of approval, and require review and reporting procedures.

     Our credit facility is floating-rate debt tied to various short-term
indices. As a result, our annual interest costs associated with this debt
may fluctuate. At September 30, 2005, there were no direct borrowings
outstanding under this facility.

     Our operations are subject to the normal hazards, including fire,
explosion, and weather-related perils. We maintain various insurance
coverages, including business interruption insurance, subject to certain
deductibles. We are not fully insured against some risks because some
risks are not fully insurable, coverage is unavailable, or premium costs,
in our judgment, do not justify such expenditures.

     Credit risk with respect to customer receivables is concentrated in
the geographic areas in which we operate and relates primarily to
customers in the oil and gas industry. To minimize this risk, we perform
ongoing credit evaluations of our customers' financial position and
require 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 our operations. As is the
case with other companies engaged in similar industries, we face
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 us or by our predecessors.

     Applicable laws and regulations govern the investigation and
remediation of contamination at our current and former properties, as well
as at third-party sites to which we sent wastes for disposal. We 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. We 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. We are currently
engaged in a number of such remediation projects.







                                    61


<PAGE>
     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 us, and changing environmental,
health and safety laws, regulations, and their respective interpretations.
We cannot provide assurance that compliance with such laws or regulations,
such investigations or clean-ups, or such enforcement proceedings or
private-party claims will not have a material adverse effect on our
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
our operations. We 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 our financial
position and the results of our operations and could require substantial
expenditures by us for, among other things:

     -  the installation and operation of refinery equipment, pollution
        control systems and other equipment not currently possessed by us;
     -  the acquisition or modification of permits applicable to our
        activities; and
     -  the initiation or modification of clean-up activities.

     In September 2005, we received an administrative compliance order
from the New Mexico Oil Conservation Division, alleging various violations
of the groundwater discharge permit at our Bloomfield refinery. For a
further discussion of matters related to this order, see Note 10 to our
Condensed Consolidated Financial Statements, captioned "Commitments and
Contingencies".

     In October 2005, we received an administrative compliance order from
the Environmental Protection Agency ("EPA"), alleging violations of
Resource Conservation and Recovery Act hazardous waste regulations due to
benzene levels in our Bloomfield refinery aeration ponds. For further
discussion of matters related to this order, see Note 10 to our
Consolidated Financial Statements, captioned "Commitments and
Contingencies".








                                    62


<PAGE>
     OTHER

     Our 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 as a result is subject to a 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 in recent years, we have not been able to cost-effectively
obtain sufficient amounts of crude oil to operate our Four Corners
refineries at full capacity. Crude oil utilization rates for our Four
Corners refineries have declined from approximately 67% for 2003 to
approximately 62% for the first nine months of 2005. Our current
projections of Four Corners crude oil production indicate that our crude
oil demand will exceed the crude oil supply that is available from local
sources for the foreseeable future and that our crude oil capacity
utilization rates at our Four Corners refineries will continue to decline
unless circumstances change.

     On August 1, 2005, we acquired an idle crude oil pipeline system that
originates near Jal, New Mexico and is connected to a company-owned
pipeline network that directly supplies crude oil to the Bloomfield and
Ciniza refineries.  When operational, the pipeline will have sufficient
crude oil transportation capacity to allow us to again operate both
refineries at maximum rates.  Startup of the pipeline is subject to, among
other things, a final engineering evaluation of the system.  It currently
is anticipated that the pipeline will become operational before the end of
2006.

     If additional crude oil or other refinery feedstocks become available
in the future via the new pipeline or otherwise, we may increase
production runs at our Four Corners refineries depending on the demand for
finished products and the refining margins attainable. We continue to
assess short-term and long-term options to address the continuing decline
in Four Corners crude oil production. The options being considered
include:

     -  evaluating potentially economic sources of crude oil produced
        outside the Four Corners area, including ways to reduce raw
        material transportation costs to our refineries;
     -  evaluating ways to encourage further production in the Four
        Corners area;
     -  changes in operation/configuration of equipment at one or both
        refineries to further the integration of the two refineries, and
        reduce fixed costs; and
     -  with sufficient further decline in raw material supply, the
        temporary, partial or permanent discontinuance of operations at
        one or both refineries.




                                    63


<PAGE>
     None of these options, however, may prove to be economically viable.
We cannot assure you that the Four Corners crude oil supply for our Ciniza
and Bloomfield refineries will continue to be available at all or on
acceptable terms for the long term, that the new pipeline will become
operational, or that the additional crude oil supplies accessible via the
new pipeline will be available on acceptable terms. Because large portions
of the refineries' costs are fixed, any significant interruption or
decline in the supply of crude oil or other feedstocks would have an
adverse effect on our Four Corners refinery operations and on our overall
operations.

     In October 2004, the President signed the American Jobs Creation Act
of 2004 (the "Act"), which includes energy related tax provisions that are
available to small refiners, including us. Under the Act, small refiners
are allowed to deduct for tax purposes up to 75% of capital expenditures
incurred to comply with the highway diesel low sulfur regulations adopted
by the Environmental Protection Agency. The deduction is taken in the year
the capital expenditure is made. Small refiners also are allowed to claim
a credit against income tax of five cents on each gallon of low sulfur
diesel fuel they produce, up to a maximum of 25% of the capital costs
incurred to comply with the regulations. We may be able to use this credit
in 2006.

     In August 2005, the President signed the Energy Policy Act of 2005
(the "Energy Act"). Under the Energy Act, refiners are allowed to deduct
for tax purposes 50% of the cost of capital expenditures that increase the
capacity of an existing refinery by at least 5%. The deduction is taken in
the year the capital expenditure is made. We may be able to use this
deduction in 2006, or future years, if we have refinery projects that
increase capacity. The Energy Act also requires that most refiners,
blenders, and importers use more ethanol in their fuels, with an industry-
wide target of 4 billion gallons in 2006 that increases to 7.5 billion
gallons in 2012. Each refinery that has less than 75,000 barrels per day
of crude oil capacity, however, is exempted from participation in this
requirement until 2011. All of our refineries qualify for the exemption.

     FORWARD-LOOKING STATEMENTS

     This report contains 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. These forward-
looking statements are not historical facts, but only predictions, and
generally can be identified by use of statements that include phrases such
as "believe," "expect," "anticipate," "estimate," "could," "plan,"
"intend," "may," "project," "predict," "will" and terms and phrases of
similar import.









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     Although we believe 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 we have made these forward-looking
statements in good faith and they reflect our current judgment regarding
such matters, actual results could vary materially from the forward-
looking statements. The forward-looking statements included in this report
are made only as of their respective dates and we undertake no obligation
to publicly update these forward-looking statements to reflect new
information, future events or otherwise. In light of these risks,
uncertainties and assumptions, the forward-looking events might or might
not occur. 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 crude oil and the adequacy and costs of raw
       material supplies generally;

     - our ability to negotiate new crude oil supply contracts;

     - our ability to successfully manage the liabilities, including
       environmental liabilities, that we assumed in the Yorktown
       acquisition;

     - our ability to obtain anticipated levels of indemnification
       associated with prior acquisitions and sales of assets;

     - competitive pressures from existing competitors and new entrants,
       and other actions that may impact our markets;

     - our ability to adequately control capital and operating expenses;

     - the risk that we will be unable to draw on our lines of credit,
       secure additional financing, access the public debt or equity
       markets or sell sufficient assets if we are unable to fund
       anticipated capital expenditures from cash flow generated by
       operations;

     - the risk of increased costs resulting from employee matters,
       including increased employee benefit costs;

     - the adoption of new state, federal or tribal legislation or
       regulations; changes to existing legislation or regulations or
       their interpretation by regulators or the courts; regulatory or
       judicial findings, including penalties; as well as other future
       governmental actions that may affect our operations, including the
       impact of any further changes to government-mandated specifications
       for gasoline, diesel fuel and other petroleum products;

     - unplanned or extended shutdowns in refinery operations;




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     - the risk that future changes in operations to address issues raised
       by threatened or pending litigation, customer preferences, or other
       factors, including those related to the use of MTBE as a motor fuel
       additive, may have an adverse impact on our results of operations.

     - the risk that we will not remain in compliance with covenants, and
       other terms and conditions, contained in our notes and credit
       facility;

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

     - general economic factors affecting our operations, markets,
       products, services and prices;

     - unexpected environmental remediation costs;

     - weather conditions affecting our operations or the areas in which
       our products are refined or marketed, including the risk that we
       will be unable to meet regulatory and other deadlines as a result
       of demands placed on engineering firms and other consultants as a
       result of hurricane damage to Gulf Coast refineries;

     - the risk we will be found to have substantial liability in
       connection with existing or pending litigation;

     - the occurrence of events that cause losses for which we are not
       fully insured;

     - the risk that costs associated with environmental projects will be
       higher than currently estimated (including costs associated with
       the resolution of outstanding environmental matters and costs
       associated with reducing the sulfur content of motor fuel) or that
       we will be unable to complete such projects (including motor fuel
       sulfur reduction projects) by applicable regulatory compliance
       deadlines;

     - the risk that we will be added as a defendant in additional MTBE
       lawsuits, and that we will incur substantial liabilities and
       substantial defense costs in connection with these suits;

     - the risk that tax authorities will challenge the positions we have
       taken in preparing our tax returns;

     - the risk that changes in manufacturer promotional programs may
       adversely impact our retail operations;

     - the risk that the cost of testing the crude oil pipeline that we
       purchased from Texas-New Mexico Pipe Line Company during the third
       quarter of 2005, and the cost of placing it in service, will be
       considerably more than our current estimates;




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     - the risk that the timetable for placing the crude oil pipeline that
       we purchased in the third quarter of 2005 will be different than
       anticipated, or that it will not be possible to place the pipeline
       in service at all;

     - the risk that it will not be possible to obtain additional crude
       oil at cost effective prices to either fill the crude oil pipeline
       that we purchased in the third quarter of 2005 or transport
       through the pipeline for processing at our Bloomfield and Ciniza
       refineries; and

     - other risks described elsewhere in this report or described from
       time to time in our other filings with the Securities and Exchange
       Commission.

     All subsequent written and oral forward-looking statements
attributable to us or persons acting on our behalf are expressly qualified
in their entirety by the previous statements. Forward-looking statements
we make represent our judgment on the dates such statements are made. We
assume 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 we
become aware of, after the date of this report.
































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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

         Our management, with the participation of our chief executive
officer and chief financial officer, evaluated the effectiveness of our
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 our 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 our internal control over financial reporting
occurred during our most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, our internal
control over financial reporting. We are currently in the process of
analyzing the internal controls over financial reporting for Dial Oil, a
100% owned subsidiary that was acquired in the third quarter of 2005.




























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<PAGE>
                                PART II

                           OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     We are a party to ordinary routine litigation incidental to our
business. We also incorporate by reference the information regarding
contingencies in Note 10 to the Condensed Consolidated Financial
Statements set forth in Part I, Item 1, and the discussion of certain
contingencies contained in Part I, Item 2, under the heading "Liquidity
and Capital Resources - Environmental, Health and Safety."

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

     None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

     10.1*  Seventh Amendment to the Giant Industries, Inc. and Affiliated
            Companies 401(k) Plan Adoption Agreement, effective September
            30, 2005.

     10.2*  Giant Industries, Inc. and Affiliated Companies Deferred
            Compensation Plan.

     31.1*  Certification of Principal Executive Officer Pursuant to
            Section 302 of the Sarbanes-Oxley Act of 2002.

     31.2*  Certification of Principal Financial Officer Pursuant to
            Section 302 of the Sarbanes-Oxley Act of 2002.

     32.1*  Certification of Principal Executive Officer Pursuant to 18
            U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
            Sarbanes-Oxley Act of 2002.

     32.2*  Certification of Principal Financial Officer Pursuant to 18
            U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
            Sarbanes-Oxley Act of 2002.

     *Filed herewith.

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

     (i)    On July 1, 2005, we filed a Form 8-K dated July 1, 2005,
            regarding the entry into an amended and restated credit
            facility.




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     (ii)   On July 13, 2005, we filed a Form 8-K dated July 13, 2005,
            containing a press release regarding the acquisition of Dial
            Oil Company.

     (iii)  On August 4, 2005, we filed a Form 8-K dated August 4, 2005,
            containing a press release detailing our earnings for the
            quarter ended June 20, 2005.

     (iv)   On September 9, 2005, we filed a Form 8-K dated September 9,
            2005, detailing the resignation of one of our directors.

     (v)    On September 13, 2005, we filed a Form 8-K dated September 13,
            2005, containing a press release regarding an offering of
            shares of our stock.

     (vi)   On October 3, 2005, we filed a Form 8-K dated October 3, 2005,
            regarding the entry into an amendment to our 401(k) plan.

     (vii)  On November 4, 2005, we filed a Form 8-K dated November 4,
            2005, regarding the establishment of the Giant Industries,
            Inc. and Affiliated Companies Deferred Compensation plan.

     (viii) On November 8, 2005, we filed a Form 8-K dated November 8,
            2005, containing a press release detailing our earnings for
            the quarter ended September 30, 2005.






























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                                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, 2005 to be signed on its behalf by the undersigned
thereunto duly authorized.

                         GIANT INDUSTRIES, INC.


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

Date: November 8, 2005





































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