SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                  FORM 10-Q


(Mark One)

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

              For the quarterly period ended June 30, 2005

                                     OR

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

            For the transition period from _______ to _______.

                        Commission File Number: 1-10398

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

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


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


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

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

                              Yes [X]    No [ ]

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

                              Yes [X]    No [ ]

Number of Common Shares outstanding at July 29, 2005: 13,424,847 shares.


<PAGE>
                   GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                                     INDEX


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

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

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

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

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

          Notes to Condensed Consolidated Financial Statements
          (Unaudited).................................................  5-36

Item 2  - Management's Discussion and Analysis of
          Financial Condition and Results of Operations............... 37-54

Item 3  - Quantitative and Qualitative Disclosures
          About Market Risk...........................................  55

Item 4  - Controls and Procedures.....................................  55

PART II - OTHER INFORMATION...........................................  56

Item 1  - Legal Proceedings...........................................  56

Item 4  - Submission of Matters to a Vote of Security Holders.........  56

Item 6  - Exhibits and Reports on Form 8-K............................  57

SIGNATURE.............................................................  59




<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>
                                                           June 30, 2005   December 31, 2004
                                                           -------------   -----------------
<S>                                                           <C>              <C>
ASSETS
Current assets:
  Cash and cash equivalents.............................      $  59,920        $  23,714
  Receivables, net......................................        133,492          101,692
  Inventories...........................................        125,167           93,500
  Prepaid expenses and other............................          4,652           11,265
  Deferred income taxes.................................          1,731            1,834
                                                              ---------        ---------
    Total current assets................................        324,962          232,005
                                                              ---------        ---------
Property, plant and equipment...........................        697,616          671,851
Less accumulated depreciation and amortization..........       (283,645)        (265,475)
                                                              ---------        ---------
                                                                413,971          406,376
                                                              ---------        ---------
Goodwill................................................         40,303           40,303
Assets held for sale....................................             33                -
Other assets............................................         23,538           23,722
                                                              ---------        ---------
                                                              $ 802,807        $ 702,406
                                                              =========        =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable......................................      $ 120,557        $  75,554
  Accrued expenses......................................         56,352           53,279
                                                              ---------        ---------
    Total current liabilities...........................        176,909          128,833
                                                              ---------        ---------
Long-term debt..........................................        274,622          292,759
Deferred income taxes...................................         55,624           41,039
Other liabilities and deferred income...................         24,752           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, 17,176,827 and
    16,085,631 shares issued............................            172              161
  Additional paid-in capital............................        159,246          135,407
  Retained earnings.....................................        147,936          117,325
                                                              ---------        ---------
                                                                307,354          252,893
  Less common stock in treasury - at cost,
    3,751,980 shares....................................        (36,454)         (36,454)
                                                              ---------        ---------
    Total stockholders' equity..........................        270,900          216,439
                                                              ---------        ---------
                                                              $ 802,807        $ 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      Six Months Ended
                                                              June 30,               June 30,
                                                       ---------------------   ----------------------
                                                          2005        2004        2005        2004
                                                       ---------   ---------   ---------   ----------
<S>                                                    <C>         <C>         <C>         <C>
Net revenues.........................................  $ 863,357   $ 654,035   $1,575,084  $1,194,843
Cost of products sold (excluding depreciation
  and amortization)..................................    748,883     557,326    1,374,673   1,018,093
                                                       ---------   ---------   ----------  ----------
Gross margin.........................................    114,474      96,709      200,411     176,750
Operating expenses...................................     48,744      43,540       94,988      87,736
Depreciation and amortization........................      9,492       9,220       20,463      18,318
Selling, general and administrative expenses.........     11,843      10,052       19,641      18,252
Net (gain)/loss on the disposal/write-down of
  assets, including assets held for sale.............       (207)        566         (219)        562
Gain from insurance settlement due to fire incident..       (196)          -       (3,688)          -
                                                       ---------   ---------   ----------  ----------
Operating income.....................................     44,798      33,331       69,226      51,882
Interest expense.....................................     (6,382)     (8,688)     (13,376)    (18,049)
Costs associated with early debt extinguishment......     (2,099)    (10,875)      (2,099)    (10,875)
Amortization of financing costs......................     (1,496)     (5,857)      (2,000)     (6,815)
Interest and investment income.......................        368          42          489          81
                                                       ---------   ---------   ----------  ----------
Earnings from continuing operations before
  income taxes.......................................     35,189       7,953       52,240      16,224
Provision for income taxes...........................     14,651       2,938       21,644       6,607
                                                       ---------   ---------   ----------  ----------
Earnings from continuing operations .................     20,538       5,015       30,596       9,617

Earnings/(loss) from discontinued operations,
  net of income tax (provision)/benefit of
  ($13), $17, ($9) and $69...........................         22        (27)           15       (111)
                                                       ---------   ---------   ----------  ----------
Net earnings.........................................  $  20,560   $   4,988   $   30,611  $    9,506
                                                       =========   =========   ==========  ==========
Net earnings (loss) per common share:
  Basic
    Continuing operations............................  $    1.53   $    0.45   $     2.37  $     0.97
    Discontinued operations..........................          -           -            -       (0.01)
                                                       ---------   ---------   ----------  ----------
                                                       $    1.53   $    0.45   $     2.37  $     0.96
                                                       =========   =========   ==========  ==========
  Assuming dilution
    Continuing operations............................  $    1.51   $    0.44   $     2.34  $     0.94
    Discontinued operations..........................          -           -            -       (0.01)
                                                       ---------   ---------   ----------  ----------
                                                       $    1.51   $    0.44   $     2.34  $     0.93
                                                       =========   =========   ==========  ==========

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>
                                                                            Six Months
                                                                          Ended June 30,
                                                                      -----------------------
                                                                         2005          2004
                                                                      ---------     ---------
<S>                                                                   <C>           <C>
Cash flows from operating activities:
  Net earnings....................................................    $  30,611     $   9,506
Adjustments to reconcile net earnings to net cash provided by
  operating activities:
  Depreciation and amortization from continuing operations........       20,463        18,318
  Depreciation and amortization from discontinued operations......            -            81
  Amortization of financing costs.................................        2,000         6,815
  Deferred income taxes...........................................       14,688         3,981
  Deferred crude oil purchase discounts...........................          615         1,936
  Net (gain)/loss on the disposal of assets from continuing
    operations, including assets held for sale....................         (219)          562
  Net (gain)/loss on the disposal of assets from discontinued
    operations, including assets held for sale....................          (22)            1
  Gain from insurance settlement of fire incident.................       (3,688)            -
  Income tax benefit from exercise of stock options...............          328             -
  Changes in operating assets and liabilities:
    (Increase) in receivables.....................................      (31,800)      (27,857)
    (Increase) decrease in inventories............................      (31,666)       15,797
    Decrease in prepaid expenses..................................        6,639         3,168
    (Increase) in other assets....................................         (303)         (586)
    Increase (decrease)in accounts payable........................       44,900        (5,062)
    Increase (decrease) in accrued expenses.......................        1,008        (5,232)
    Increase in other liabilities.................................        1,090         2,681
                                                                      ---------     ---------
Net cash provided by operating activities.........................       54,644        24,109
                                                                      ---------     ---------
Cash flows from investing activities:
  Purchase of property, plant and equipment.......................      (27,697)      (19,057)
  Proceeds from assets held for sale..............................        1,866         6,553
  Yorktown refinery acquisition contingent payment................            -       (11,695)
  Proceeds from insurance settlement of fire incident.............        3,688             -
  Proceeds from sale of property, plant and equipment and
    other assets..................................................        1,124           184
  Funding of restricted cash escrow funds.........................      (21,883)         (235)
  Release of restricted cash escrow funds.........................       21,883             -
                                                                      ---------     ---------
Net cash used in investing activities.............................      (21,019)      (24,250)
                                                                      ---------     ---------
Cash flows from financing activities:
  Payments of long-term debt......................................      (18,828)     (205,631)
  Proceeds from issuance of long-term debt........................            -       147,467
  Long-term debt issuance costs...................................            -        (3,000)
  Proceeds from line of credit....................................       36,000             -
  Payments on line of credit......................................      (36,000)            -
  Net proceeds from issuance of common stock......................       22,349        57,374
  Proceeds from exercise of stock options.........................          202           303
  Deferred financing costs........................................       (1,142)       (2,259)
                                                                      ---------     ---------
Net cash provided by (used in) financing activities...............        2,581        (5,746)
                                                                      ---------     ---------
Net increase in cash and cash equivalents.........................       36,206        (5,887)
  Cash and cash equivalents:
    Beginning of period...........................................       23,714        27,263
                                                                      ---------     ---------
    End of period.................................................    $  59,920     $  21,376
                                                                      =========     =========

                                              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. At June 30, 2005,
approximately $4,710,000 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 Phoenix Fuel Co., Inc. subsidiary distributes
commercial wholesale petroleum products primarily in Arizona.

     We have three business segments:

     -  our refining group;
     -  our retail group; and
     -  Phoenix Fuel.

     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
six months ended June 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). These reclassifications
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     Six Months Ended
                                             June 30,              June 30,
                                        ------------------    ------------------
                                          2005       2004       2005       2004
                                        -------    -------    -------    -------
                                          (In thousands, except per share data)
<S>                                     <C>        <C>        <C>        <C>
Net earnings, as reported.............  $20,560    $ 4,988    $30,611    $ 9,506
Deduct: Total stock-based employee
  compensation expense determined
  under the fair value based method
  for all awards, net of related
  tax effect..........................       (7)       (40)       (24)       (99)
                                        -------    -------    -------    -------
Pro forma net earnings................  $20,553    $ 4,948    $30,587    $ 9,407
                                        =======    =======    =======    =======
Earnings per share:
  Basic - as reported.................  $  1.53    $  0.45    $  2.37    $  0.96
                                        =======    =======    =======    =======
  Basic - pro forma...................  $  1.53    $  0.45    $  2.37    $  0.95
                                        =======    =======    =======    =======
  Diluted - as reported...............  $  1.51    $  0.44    $  2.34    $  0.93
                                        =======    =======    =======    =======
  Diluted - pro forma.................  $  1.51    $  0.44    $  2.34    $  0.92
                                        =======    =======    =======    =======
</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. In April 2005, the Securities and Exchange
Commission directed that SFAS 123R would not be required to be implemented
by public companies until the beginning of the first fiscal year beginning
after December 15, 2005. 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, is currently considering the issue as to whether 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.

     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",
that such 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.
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>
NOTE 2 - INVENTORIES:

     Our inventories consist of the following:

<TABLE>
<CAPTION>
                                         June 30, 2005    December 31, 2004
                                         -------------    -----------------
                                                    (In thousands)
<S>                                         <C>                <C>
First-in, first-out ("FIFO") method:
  Crude oil............................     $ 62,003           $ 44,435
  Refined products.....................      102,452             68,863
  Refinery and shop supplies...........       13,353             12,330
  Merchandise..........................        3,493              3,092
Retail method:
  Merchandise..........................        9,386              9,419
                                            --------           --------
    Subtotal...........................      190,687            138,139
Adjustment for last-in,
  first-out ("LIFO") method............      (65,520)           (44,639)
                                            --------           --------
    Total..............................     $125,167           $ 93,500
                                            ========           ========
</TABLE>

     The portion of inventories valued on a LIFO basis totaled $86,505,784
and $63,956,000 at June 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 June 30,
2005 and 2004, net earnings and diluted earnings per share would have been
higher as follows:

<TABLE>
<CAPTION>
                                   Three Months Ended     Six Months Ended
                                        June 30,              June 30,
                                   ------------------    ------------------
                                     2005       2004       2005       2004
                                   -------    -------    -------    -------
                                     (In thousands, except per share data)
<S>                                <C>        <C>        <C>        <C>
Net earnings...................    $4,533     $5,631     $12,186    $12,476
Diluted earnings per share.....    $ 0.33     $ 0.50     $  0.93    $  1.23
</TABLE>







                                    8


<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 quarter 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:

            Net earnings...........................  $538,000
            Diluted earnings per share.............  $   0.06

     The LIFO layers that were liquidated in the first quarter of 2004
were deemed to be a permanent liquidation. There were no LIFO layers
liquidated in the first half of 2005.




































                                    9


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

     At June 30, 2005 and December 31, 2004, we had goodwill of
$40,303,000. The goodwill balance consists of the following:

                                         (In thousands)

             Refining Group................. $21,153
             Retail Group...................   4,414
             Phoenix Fuel...................  14,736
                                             -------
             Total.......................... $40,303
                                             =======

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

<TABLE>
<CAPTION>
                                                   June 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.....................    $ 3,667       $ 2,789      $   878     $ 3,630       $ 2,708      $   922
  Contracts.........................      1,376         1,168          208       1,367         1,109          258
  Licenses and permits..............      1,096           439          657       1,096           379          717
                                        -------       -------      -------     -------       -------      -------
                                          6,139         4,396        1,743       6,093         4,196        1,897
                                        -------       -------      -------     -------       -------      -------
Unamortized intangible assets:
  Liquor licenses...................      7,315             -        7,315       7,315             -        7,315
                                        -------       -------      -------     -------       -------      -------
Total intangible assets.............    $13,454       $ 4,396      $ 9,058     $13,408       $ 4,196      $ 9,212
                                        =======       =======      =======     =======       =======      =======
</TABLE>

     Intangible asset amortization expense for the three and six months
ended June 30, 2005 was approximately  $100,000 and $200,000,
respectively. Intangible asset amortization expense for the three and six
months ended June 30, 2004 was $95,800 and $205,000, respectively.
Estimated amortization expense for the rest of this fiscal year and the
next five fiscal years is as follows:

          2005 Remainder....................     $204,000
          2006..............................      411,000
          2007..............................      263,000
          2008..............................      221,000
          2009..............................      206,000
          2010..............................       75,000

                                    10


<PAGE>
NOTE 4 - ASSETS HELD FOR SALE, 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   Six Months Ended
                                              June 30,            June 30,
                                         ------------------   ----------------
                                           2005     2004       2005      2004
                                          ------   ------     ------   -------
                                                      (In thousands)
<S>                                       <C>      <C>        <C>      <C>
Net revenues...........................   $    -   $  490     $    -   $ 1,278
                                          ------   ------     ------   -------
Net operating income/(loss)............   $   13   $  (61)    $    2   $  (179)
Gain on disposal.......................   $   22   $  389     $   22   $   371
Impairment and other write-downs.......   $    -   $ (372)    $    -   $  (372)
                                          ------   ------     ------   -------
Gain/(loss) before income taxes........   $   35   $  (44)    $   24   $  (180)
                                          ------   ------     ------   -------
Net earnings/(loss)....................   $   22   $  (27)    $   15   $  (111)
</TABLE>

     Included in "Assets Held for Sale" in the accompanying Consolidated
Balance Sheets are the following categories of assets.

<TABLE>
<CAPTION>
                                              June 30,   December 31,
                                               2005          2004
                                             ---------   ------------
                                                   (In thousands)
<S>                                           <C>          <C>
Land.....................................     $     33     $     -
                                              --------     -------
                                              $     33     $     -
                                              ========     =======
</TABLE>

     During the first half of 2005, we sold a piece of vacant land for
approximately $1,717,000 and a closed store for approximately $149,000. We
recorded a gain on sale of the vacant land of approximately $121,000 and a
gain on sale of the closed store of approximately $22,000. We also
transferred $33,000 to assets held for sale.








                                    11


<PAGE>
NOTE 5 - ASSET RETIREMENT OBLIGATIONS:

     On January 1, 2003, we adopted SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 addresses financial accounting and
reporting obligations associated with the retirement of tangible long-
lived assets and the associated asset retirement costs. This statement
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 $334,000 as of June
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". 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.

     We 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 pipe 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.





                                    12


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

<TABLE>
<CAPTION>
                                             June 30,     December 31,
                                              2005            2004
                                            ---------     ------------
                                                 (In thousands)
<S>                                          <C>             <C>
Liability beginning of year...........       $2,272          $2,223
Liabilities incurred..................            -              57
Liabilities settled...................          (82)           (259)
Accretion expense.....................          166             251
                                             ------          ------
Liability end of period...............       $2,356          $2,272
                                             ======          ======
</TABLE>

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
































                                    13


<PAGE>
NOTE 6 - LONG-TERM DEBT:

     Our long-term debt consisted of the following:

<TABLE>
<CAPTION>
                                                        June 30, 2005   December 31, 2004
                                                        -------------   -----------------
                                                                  (In thousands)
<S>                                                        <C>              <C>
11% senior subordinated notes, due 2012, net of
  unamortized discount of $3,032 and $3,635,
  interest payable semi-annually.....................      $126,969         $145,194
8% senior subordinated notes, due 2014, net of
  unamortized discount of $2,347 and $2,435,
  interest payable semi-annually.....................       147,653          147,565
                                                           --------         --------
  Total                                                    $274,622         $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.




                                    14


<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 June
30, 2005, retained earnings available for dividends under the most
restrictive terms of the indentures were approximately $41,818,000.

     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 June 30, 2005, this rate was approximately
5.12% 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 June 30, 2005, there were no direct borrowings outstanding under
the Credit Facility. At June 30, 2005, there were, however, $35,497,000 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:






                                    15


<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.















                                    16


<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         Six Months Ended
                                                 June 30,                 June 30,
                                          ----------------------   ----------------------
                                            2005         2004        2005         2004
                                          ---------    ---------   ---------    ---------
<S>                                       <C>          <C>         <C>          <C>
Service cost...........................   $ 339,131    $ 345,005   $ 678,262    $ 690,010
Interest cost..........................     167,780      134,294     335,560      268,588
Expected return on plan assets.........     (69,345)     (28,624)   (138,690)     (57,248)
Amortization of prior service cost.....     (26,618)           -     (53,236)           -
Amortization of net loss...............      14,992            -      29,984            -
                                          ---------    ---------   ---------    ---------
Net Periodic Benefit Cost..............   $ 425,940    $ 450,675   $ 851,880    $ 901,350
                                          =========    =========   =========    =========
</TABLE>

<TABLE>
<CAPTION>
                                                             Yorktown
                                                       Retiree Medical Plan
                                          -----------------------------------------------
                                            Three Months Ended         Six Months Ended
                                                 June 30,                 June 30,
                                          ----------------------   ----------------------
                                            2005         2004        2005         2004
                                          ---------    ---------   ---------    ---------
<S>                                       <C>          <C>         <C>          <C>
Service cost...........................   $  54,924    $  51,893   $ 109,848    $ 103,786
Interest cost..........................      55,166       48,673     110,332       97,346
Expected return on plan assets.........           -            -           -            -
Amortization of prior service costs....           -            -           -            -
Amortization of net loss...............       4,001        4,374       8,002        8,748
                                          ---------    ---------   ---------    ---------
Net Periodic Benefit Cost..............   $ 114,091    $ 104,940   $ 228,182    $ 209,880
                                          =========    =========   =========    =========
</TABLE>









                                    17


<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      Six Months Ended
                                                           June 30,              June 30,
                                                    ---------------------  ---------------------
                                                       2005        2004       2005       2004
                                                    ----------  ---------  ----------  ---------
Numerator                                                          (In thousands)
<S>                                                 <C>         <C>        <C>         <C>
Earnings from continuing operations..............   $   20,538  $   5,015  $   30,596  $   9,617
Earnings/(loss) from discontinued operations.....           22        (27)         15       (111)
                                                    ----------  ---------  ----------  ---------
Net earnings.....................................   $   20,560  $   4,988  $   30,611  $   9,506
                                                    ==========  =========  ==========  =========
</TABLE>

<TABLE>
<CAPTION>
                                                     Three Months Ended       Six Months Ended
                                                           June 30,               June 30,
                                                    ---------------------   ---------------------
                                                       2005        2004        2005       2004
                                                    ----------  ---------   ----------  ---------
Denominator
<S>                                                 <C>         <C>         <C>         <C>
Basic - weighted average shares outstanding......   13,405,673  10,997,348  12,896,435   9,910,068
Effect of dilutive stock options.................      179,620     274,077     188,686     272,378
                                                    ----------  ----------  ----------  ----------
Diluted - weighted average shares outstanding....   13,585,293  11,271,425  13,085,121  10,182,446
                                                    ==========  ==========  ==========  ==========
</TABLE>

<TABLE>
<CAPTION>
                                                     Three Months Ended      Six Months Ended
                                                           June 30,              June 30,
                                                    ---------------------  ---------------------
                                                       2005        2004       2005       2004
                                                    ----------  ---------  ----------  ---------
Basic Earnings (Loss) Per Share
<S>                                                 <C>         <C>        <C>         <C>
Earnings from continuing operations..............   $     1.53  $    0.45  $     2.37  $    0.97
Loss from discontinued operations................            -          -           -      (0.01)
                                                    ----------  ---------  ----------  ---------
Net earnings.....................................   $     1.53  $    0.45  $     2.37  $    0.96
                                                    ==========  =========  ==========  =========
</TABLE>


                                    18


<PAGE>
<TABLE>
<CAPTION>
                                                     Three Months Ended      Six Months Ended
                                                           June 30,              June 30,
                                                    ---------------------  ---------------------
                                                       2005        2004       2005       2004
                                                    ----------  ---------  ----------  ---------
Diluted Earnings (Loss) Per Share
<S>                                                 <C>         <C>        <C>         <C>
Earnings from continuing operations..............   $     1.51  $    0.44  $     2.34  $    0.94
Loss from discontinued operations................            -          -           -      (0.01)
                                                    ----------  ---------  ----------  ---------
Net earnings.....................................   $     1.51  $    0.44  $     2.34  $    0.93
                                                    ==========  =========  ==========  =========
</TABLE>

     In March 2005, we issued 1,000,000 shares of common stock. See Note 6
for further information. 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.


































                                    19


<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 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 Phoenix Fuel supplies the gasoline and diesel fuel our
retail group sells. We purchase general merchandise and food products from
various suppliers. At June 30, 2005, we operated 124 service stations with
convenience stores or kiosks.

PHOENIX FUEL

     Phoenix Fuel distributes commercial wholesale petroleum products. It
includes several lubricant and bulk petroleum distribution plants, an
unmanned fleet fueling operation, a bulk lubricant terminal facility, and
a fleet of finished product and lubricant delivery trucks. Phoenix Fuel
purchases 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.







                                    20


<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 six months ended June 30, 2005
and 2004, are presented below.






































                                    21


<PAGE>
<TABLE>
<CAPTION>
                                                   As of and for the Three Months Ended June 30, 2005
                                            ----------------------------------------------------------------
                                            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..............   $149,277
    Yorktown operations..................    376,641
                                            --------
      Total..............................   $525,918  $ 78,318  $187,062  $      -   $      -     $ 791,298
  Merchandise and lubricants.............          -    36,325     9,627         -          -        45,952
  Other..................................     21,162     4,230       502       213          -        26,107
                                            --------  --------  --------  --------   --------     ---------
      Total..............................    547,080   118,873   197,191       213          -       863,357
                                            --------  --------  --------  --------   --------     ---------
Intersegment net revenues:
  Finished products......................     60,937         -    18,532         -    (79,469)            -
  Other..................................      5,104         -         -         -     (5,104)            -
                                            --------  --------  --------  --------   --------     ---------
      Total..............................     66,041         -    18,532         -    (84,573)            -
                                            --------  --------  --------  --------   --------     ---------
Total net revenues.......................    613,121   118,873   215,723       213    (84,573)      863,357
Less net revenues of discontinued
  operations.............................          -         -         -         -          -             -
                                            --------  --------  --------  --------   --------     ---------
Net revenues of continuing operations....   $613,121  $118,873  $215,723  $    213   $(84,573)    $ 863,357
                                            ========  ========  ========  ========   ========     =========
Operating income (loss):
  Four Corners operations................   $ 19,724
  Yorktown operations....................     27,312
                                            --------
      Total operating income (loss)
        before corporate allocation......   $ 47,036  $  3,114  $  2,815  $ (8,557)  $    425     $  44,833
Corporate allocation.....................     (4,372)   (2,535)     (790)    7,697          -             -
                                            --------  --------  --------  --------   --------     ---------
Total operating income (loss) after
  corporate allocation...................     42,664       579     2,025      (860)       425        44,833
Discontinued operations (gain) loss......          -       (13)        -         -        (22)          (35)
                                            --------  --------  --------  --------   --------     ---------
  Operating income (loss) from
    continuing operations................   $ 42,664  $    566  $  2,025  $   (860)  $    403        44,798
                                            ========  ========  ========  ========   ========
Interest expense.........................                                                            (6,382)
Costs associated with early
  debt extinguishment....................                                                            (2,099)
Amortization and write-offs of
  financing costs........................                                                            (1,496)
Interest and investment income...........                                                               368
                                                                                                  ---------
Earnings from continuing operations
  before income taxes....................                                                         $  35,189
                                                                                                  =========
Depreciation and amortization:
  Four Corners operations................   $  4,101
  Yorktown operations....................      2,638
                                            --------
      Total..............................   $  6,739  $  2,190  $    370  $    193   $      -     $   9,492
  Less discontinued operations...........          -         -         -         -          -             -
                                            --------  --------  --------  --------   --------     ---------
  Continuing operations..................   $  6,739  $  2,190  $    370  $    193   $      -     $   9,492
                                            ========  ========  ========  ========   ========     =========
Total assets.............................   $531,578  $106,279  $ 90,941  $ 74,009   $      -     $ 802,807
Capital expenditures.....................   $ 12,720  $  1,230  $    576  $    345   $      -     $  14,871

                                                   22
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                                                   As of and for the Three Months Ended June 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..............   $103,724
    Yorktown operations..................    279,622
                                            --------
    Total................................   $383,346  $ 61,346  $154,855  $      -   $       -    $  599,547
  Merchandise and lubricants.............          -    34,541     8,261         -           -        42,802
  Other..................................      7,811     3,785       527        53           -        12,176
                                            --------  --------  --------  --------   ---------    ----------
    Total................................    391,157    99,672   163,643        53           -    $  654,525
                                            --------  --------  --------  --------   ---------    ----------
Intersegment net revenues:
  Finished products......................     47,704         -    18,766         -     (66,470)            -
  Other..................................      3,729         -         -         -      (3,729)            -
                                            --------  --------  --------  --------   ---------    ----------
    Total................................     51,433         -    18,766         -     (70,199)            -
                                            --------  --------  --------  --------   ---------    ----------
Total net revenues.......................    442,590    99,672   182,409        53     (70,199)      654,525
Less net revenues of discontinued
  operations.............................          -      (490)        -         -           -          (490)
                                            --------  --------  --------  --------   ---------    ----------
Net revenues of continuing operations....   $442,590  $ 99,182  $182,409  $     53   $ (70,199)   $  654,035
                                            ========  ========  ========  ========   =========    ==========
Operating income (loss):
  Four Corners operations................   $ 13,704
  Yorktown operations....................     21,811
                                            --------
Total operating income (loss) before
   corporate allocation..................   $ 35,515  $  2,614  $  2,963  $ (7,256)  $    (549)   $   33,287
Corporate allocation.....................     (3,717)   (2,152)     (654)    6,523           -             -
                                            --------  --------  --------  --------   ---------    ----------
Total operating income (loss) after
   corporate allocation..................     31,798       462     2,309      (733)       (549)       33,287
Discontinued operations loss/(gain)......          -        61         -         -         (17)           44
                                            --------  --------  --------  --------   ---------    ----------
Operating income (loss)
  from continuing operations.............   $ 31,798  $    523  $  2,309  $   (733)  $    (566)       33,331
                                            ========  ========  ========  ========   =========
Interest expense.........................                                                             (8,688)
Costs associated with early debt
  extinguishment.........................                                                            (10,875)
Amortization and write-offs of financing.
  costs..................................                                                             (5,857)
Interest income..........................                                                                 42
                                                                                                  ----------
Earnings from continuing operations
  before income taxes....................                                                         $    7,953
                                                                                                  ==========
Depreciation and amortization:
  Four Corners operations................   $  4,096
  Yorktown operations....................      2,266
                                            --------
    Total................................   $  6,362  $  2,269  $    409  $    214   $       -    $    9,254
    Less discontinued operations.........          -       (34)        -         -           -           (34)
                                            --------  --------  --------  --------   ---------    ----------
    Continuing operations................   $  6,362  $  2,235  $    409  $    214   $       -    $    9,220
                                            ========  ========  ========  ========   =========    ==========
Total assets.............................   $482,863  $111,247  $ 79,404  $ 35,907   $       -    $  709,421
Capital expenditures.....................   $ 14,832  $    394  $    505  $    113   $       -    $   15,844
Yorktown refinery acquisition
  contingent payment.....................   $  7,646  $      -  $      -  $      -   $       -    $    7,646

                                                   23
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                                                      As of and for the Six Months Ended June 30, 2005
                                            ------------------------------------------------------------------
                                            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..............   $  270,151
    Yorktown operations..................      673,345
                                            ----------
      Total..............................   $  943,496  $140,128  $353,804  $      -   $       -    $1,437,428
  Merchandise and lubricants.............            -    67,612    18,649         -           -        86,261
  Other..................................       41,934     8,059     1,089       313           -        51,395
                                            ----------  --------  --------  --------   ---------    ----------
      Total..............................      985,430   215,799   373,542       313           -     1,575,084
                                            ----------  --------  --------  --------   ---------    ----------
Intersegment net revenues:
  Finished products......................      111,252         -    33,845         -    (145,097)            -
  Other..................................        9,465         -         -         -      (9,465)            -
                                            ----------  --------  --------  --------   ---------    ----------
      Total..............................      120,717         -    33,845         -    (154,562)            -
                                            ----------  --------  --------  --------   ---------    ----------
Total net revenues.......................    1,106,147   215,799   407,387       313    (154,562)    1,575,084
Less net revenues of discontinued
  operations.............................            -         -         -         -           -             -
                                            ----------  --------  --------  --------   ---------    ----------
Net revenues of continuing operations....   $1,106,147  $215,799  $407,387  $    313   $(154,562)   $1,575,084
                                            ==========  ========  ========  ========   =========    ==========
Operating income (loss):
  Four Corners operations................   $   26,010
  Yorktown operations....................       44,962
                                            ----------
      Total operating income (loss)
        before corporate allocation......   $   70,972  $  1,435  $  6,515  $(13,601)   $  3,929    $   69,250
Corporate allocation.....................       (7,110)   (4,099)   (1,322)   12,531           -             -
                                            ----------  --------  --------  --------   ---------    ----------
Total operating income (loss) after
  corporate allocation...................       63,862    (2,664)    5,193    (1,070)      3,929        69,250
Discontinued operations loss.............            -        (2)        -         -         (22)          (24)
                                            ----------  --------  --------  --------   ---------    ----------
  Operating income (loss) from
    continuing operations................   $   63,862  $ (2,666) $  5,193  $ (1,070)  $   3,907        69,226
                                            ==========  ========  ========  ========   =========
Interest expense.........................                                                              (13,376)
Costs associated with early
  debt extinguishment....................                                                               (2,099)
Amortization and write-offs of
  financing costs........................                                                               (2,000)
Interest and investment income...........                                                                  489
                                                                                                    ----------
Earnings from continuing operations
  before income taxes....................                                                           $   52,240
                                                                                                    ==========
Depreciation and amortization:
  Four Corners operations................   $    8,171
  Yorktown operations....................        5,296
                                            ----------
      Total..............................   $   13,467  $  5,737  $    886  $    373   $       -    $   20,463
  Less discontinued operations...........            -         -         -         -           -             -
                                            ----------  --------  --------  --------   ---------    ----------
  Continuing operations..................   $   13,467  $  5,737  $    886  $    373   $       -    $   20,463
                                            ==========  ========  ========  ========   =========    ==========
Total assets.............................   $  531,578  $106,279  $ 90,941  $ 74,009   $       -    $  802,807
Capital expenditures.....................   $   23,725  $  2,010  $  1,035  $    927   $       -    $   27,697

                                                   24
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                                                    As of and for the Six Months Ended June 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..............   $189,752
    Yorktown operations..................    507,269
                                            --------
      Total..............................   $697,021  $109,175  $277,718  $      -   $       -   $1,083,914
  Merchandise and lubricants.............          -    65,385    15,597         -           -       80,982
  Other..................................     22,338     7,631       924       332           -       31,225
                                            --------  --------  --------  --------   ---------   ----------
      Total..............................    719,359   182,191   294,239       332           -   $1,196,121
                                            --------  --------  --------  --------   ---------   ----------
Intersegment net revenues:
  Finished products......................    103,661         -    31,062         -    (134,723)           -
  Other..................................      7,766         -         -         -      (7,766)           -
                                            --------  --------  --------  --------   ---------   ----------
      Total..............................    111,427         -    31,062         -    (142,489)           -
                                            --------  --------  --------  --------   ---------   ----------
Total net revenues.......................    830,786   182,191   325,301       332    (142,489)   1,196,121
Less net revenues of discontinued
  operations.............................          -    (1,278)        -         -           -       (1,278)
                                            --------  --------  --------  --------   ---------   ----------
Net revenues of continuing operations....   $830,786  $180,913  $325,301  $    332   $(142,489)  $1,194,843
                                            ========  ========  ========  ========   =========   ==========
Operating income (loss):
  Four Corners operations................   $ 19,864
  Yorktown operations....................     36,246
                                            --------
      Total operating income (loss)
        before corporate allocation......   $ 56,110  $  3,601  $  5,076  $(12,522)  $    (563)  $   51,702
Corporate allocation.....................     (6,540)   (3,786)   (1,150)   11,476           -            -
                                            --------  --------  --------  --------   ---------   ----------
Total operating income (loss) after
  corporate allocation...................     49,570      (185)    3,926    (1,046)       (563)      51,702
Discontinued operations loss.............          -       179         -         -           1          180
                                            --------  --------  --------  --------   ---------   ----------
  Operating income (loss) from
    continuing operations................   $ 49,570  $     (6) $  3,926  $ (1,046)  $    (562)      51,882
                                            ========  ========  ========  ========   =========
Interest expense.........................                                                           (18,049)
Costs associated with early debt
  extinguishment.........................                                                           (10,875)
Amortization and write-offs of
  financing costs........................                                                            (6,815)
Interest and investment income...........                                                                81
                                                                                                 ----------
Earnings from continuing operations
  before income taxes....................                                                        $   16,224
                                                                                                 ==========
Depreciation and amortization:
  Four Corners operations................   $  8,074
  Yorktown operations....................      4,392
                                            --------
      Total..............................   $ 12,466  $  4,673  $    824  $    436   $       -   $   18,399
  Less discontinued operations...........          -       (81)        -         -           -          (81)
                                            --------  --------  --------  --------   ---------   ----------
  Continuing operations..................   $ 12,466  $  4,592  $    824  $    436   $       -   $   18,318
                                            ========  ========  ========  ========   =========   ==========
Total assets.............................   $482,863  $111,247  $ 79,404  $ 35,907   $       -   $  709,421
Capital expenditures.....................   $ 17,448  $    652  $    833  $    124   $       -   $   19,057
Yorktown Refinery acquisition
  contingent payment.....................   $ 11,695  $      -  $      -  $      -   $       -   $   11,695

                                                   25
</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 June 30, 2005 and December 31, 2004, we had environmental
liability accruals of approximately $5,571,000 and $6,156,000,
respectively, which are summarized below, and litigation accruals in the
aggregate of $1,066,000 at June 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.











                                    26


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

                                            December 31,   Increase                June 30,
                                               2004       (Decrease)   Payments      2005
                                            ------------  ----------   --------  -------------
<S>                                          <C>           <C>          <C>         <C>
Yorktown Refinery.........................   $ 4,531       $   57       $ (460)     $ 4,128
Farmington Refinery.......................       570            -            -          570
Bloomfield Refinery.......................       251            -           (4)         247
Bloomfield - West Outfall.................        44            -          (44)           -
Bloomfield Tank Farm (Old Terminal).......        53            -           (6)          47
Ciniza - Land Treatment Facility..........       186            -           (8)         178
Ciniza - Solid Waste Management Units.....       274            -          (10)         264
Ciniza Well Closures......................       109         (109)           -            -
Retail Service Stations - Various.........       138           18          (54)         102
Pipeline - East Line......................         -          111          (76)          35
                                             -------       ------       ------      -------
   Totals.................................   $ 6,156       $   77       $ (662)     $ 5,571
                                             =======       ======       ======      =======
</TABLE>

      Approximately $4,992,000 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;
     - hydrocarbon contamination on and adjacent to the 5.5 acres that we
       own in Bloomfield, New Mexico; and
     - remediation of hydrocarbon discharges that seeped into two small
       gullies, or draws, on the north side of the Bloomfield refinery
       site.

     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.








                                    27


<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 $3,975,000 of
this amount through the second 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. 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 Resource
Conservation and Recovery Act 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






                                    28


<PAGE>
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.

     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. 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 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.

     Additionally, 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. 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 in the 2010 to 2012 timeframe.

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




                                    29


<PAGE>
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
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.

LEE ACRES LANDFILL

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

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

     BLM made a proposed clean-up plan for the landfill available to the
public in 1996. In September 2004, EPA and BLM issued a Record of
Decision, which presents the clean-up plan selected for the landfill. The
selected remedy consists of placing a cap over a portion of the old
landfill, together with a barrier to prevent contaminants from moving off





                                    30


<PAGE>
the site, groundwater monitoring, and site usage limitations. The Record
of Decision states that the total estimated cost of these actions is
$2,200,000 in the near term, with the total future cost for remediation of
the landfill not expected to exceed $3,500,000 over 30 years. If
monitoring data indicated a long-term trend of significantly increasing
pollution concentrations, then the selected remedy would be reevaluated,
and appropriate corrective action would be taken, if needed. We believe
that the major construction activities associated with the landfill clean-
up plan have been completed.

     In 1989, one of our consultants estimated, based on various
assumptions, that our share of potential liability could be approximately
$1,200,000. This figure was based upon estimated landfill remediation
costs significantly higher than the estimated costs reflected in the
Record of Decision. The figure also was based on the consultant's
evaluation of such factors as available clean-up technology, BLM's
involvement at the site and the number of other entities that may have had
involvement at the site, but did not include an analysis of all of our
potential legal defenses and arguments, including possible setoff rights.

     Potentially responsible party liability is joint and several, which
means that a responsible party may be liable for all of the clean-up costs
at a site even though the party was responsible for only a small part of
the contamination. Although it is possible that we may ultimately incur
liability for clean-up costs associated with the landfill, a reasonable
estimate of the amount of this liability, if any, cannot be made at this
time for various reasons. These reasons include:

     - a number of entities had involvement at the site;
     - allocation of responsibility among potentially responsible parties
       has not yet been proposed or made; and
     - potentially applicable factual and legal issues have not been
       resolved.

     Accordingly, we have not recorded a liability in relation to BLM's
selected plan because the amount of any potential liability is currently
not determinable.

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




                                    31


<PAGE>
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 the Resource Conservation and Recovery Act. 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 $247,000, and that these expenses
will be incurred through approximately 2018.

WESTERN OUTFALL - BLOOMFIELD REFINERY

     In August 2004, hydrocarbon discharges were discovered seeping into
two small gullies, or draws, on the north side of the Bloomfield refinery
site. 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.

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 $47,000 in expenses from 2005 through 2007 to
continue remediation, including groundwater monitoring and testing, until
natural attenuation has completed the process of groundwater remediation.









                                    32


<PAGE>
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. We have since participated in joint
meetings with NMED and EPA and reached an administrative settlement, in
the form of consent agreements, with both agencies in July 2005.

     The administrative settlement resolves all alleged violations related
to the 2001 inspections. It requires us to pay 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 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.

     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





                                    33


<PAGE>
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 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 government. One refiner has asked the full Court of Appeals
to reconsider the decision. Our case has been stayed pending final
resolution of the appeal. 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
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:





                                    34


<PAGE>
     - 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 transported to an Albuquerque hospital. Since then, all employees have
been released from the hospital.

     In October 2004, the Occupational Health and Safety Board of the New
Mexico Environment Department ("OHSB") completed an investigation of
matters relating to the fire. We finalized a settlement with OHSB in June
2005 pursuant to which we paid fines of $16,450.

     An investigation by the U.S. Chemical Safety and Hazard Investigation
Board ("CSB") of matters relating to the fire is ongoing. CSB, however,
does not have authority to issue any monetary fines.































                                    35


<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 for $9,000,000. 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 in 12 to 18 months from the
acquisition date.

     On July 12, 2005, we acquired 100% of the common shares of Dial Oil
Company ("Dial"). We funded this acquisition with cash on hand. Dial is a
wholesale distributor of gasoline, diesel and lubricants in the Four
Corners area of the Southwest. Dial also owns and operates service
stations/convenience stores. Dial's assets include bulk petroleum
distribution plants, cardlock fueling locations, and a fleet of truck
transports. We will allocate the purchase price, including direct costs
incurred, to the assets and liabilities in the third quarter of 2005.


































                                    36


<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 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 June 30, 2005. The retail group sells its
petroleum products and merchandise to consumers in New Mexico, Arizona and
southern Colorado. Phoenix Fuel distributes commercial wholesale petroleum
products primarily in Arizona.

     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
that differ considerably from those that would result from the application





                                    37


<PAGE>
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 and in our Annual Report on Form
10-K for the year ended December 31, 2004 in Item 8 and Note 11 to our
Consolidated Financial Statements in Part I, Item 1.



























                                    38


<PAGE>
     Below is operating data for our operations:

<TABLE>
<CAPTION>
                                                      Three Months Ended      Six Months Ended
                                                           June 30,                June 30,
                                                    ---------------------   ---------------------
                                                       2005        2004        2005        2004
                                                    ---------   ---------   ---------   ---------
<S>                                                  <C>         <C>         <C>         <C>
Refining Group Operating Data:
  Four Corners Operations:
    Crude Oil/NGL Throughput (BPD)...........        29,811       26,463      29,313      27,372
    Refinery Sourced Sales Barrels (BPD).....        29,344       25,175      28,954      26,395
    Average Crude Oil Costs ($/Bbl)..........       $ 51.64      $ 35.97     $ 49.63     $ 34.30
    Refining Margins ($/Bbl).................       $ 13.48      $ 12.44     $ 10.72     $ 10.30
  Yorktown Operations:
    Crude Oil/NGL  Throughput (BPD)..........        68,449       67,639      67,102      64,420
    Refinery Sourced Sales Barrels (BPD).....        71,539       69,862      67,157      66,843
    Average Crude Oil Costs ($/Bbl)..........       $ 48.76      $ 35.53     $ 46.92     $ 34.11
    Refining Margins ($/Bbl).................       $  7.30      $  6.20     $  7.06     $  5.89
Retail Group Operating Data:
(Continuing operations only)
  Fuel Gallons Sold (000's)..................        41,410       38,188      80,879      75,420
  Fuel Margins ($/gal).......................       $ 0.171      $ 0.211     $ 0.143     $ 0.187
  Merchandise Sales ($ in 000's).............       $36,325      $34,449     $67,612     $65,102
  Merchandise Margins........................           27%          24%         27%         25%
  Operating Retail Outlets at Period End.....           124          124         124         124
Phoenix Fuel Operating Data:
  Fuel Gallons Sold (000's)..................       120,344      124,342     241,209     237,186
  Fuel Margins ($/gal).......................       $ 0.058      $ 0.055     $ 0.060     $ 0.054
  Lubricant Sales ($ in 000's)...............       $ 9,027      $ 7,827     $17,439     $14,703
  Lubricant Margins..........................           10%          13%         12%         13%
</TABLE>

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

     -  stronger net refining margins for our Yorktown refinery 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;
        -  tight finished product supply in certain of our market areas;
           and
        -  the processing of lower priced acidic crude oils at our
           Yorktown refinery, including crude oil purchased under our
           supply agreement with Statoil that began deliveries in late
           February 2004.


                                    39


<PAGE>
     -  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.

     EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     Our earnings from continuing operations before income taxes increased
$27,236,000 for the three months ended June 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 $11,521,000 primarily due to higher
        volumes and margins realized; and
-  an implementation of our debt reduction strategy that resulted in
   the following:
             - a $2,306,000 or 27% decrease in interest expense;
             - a decrease of $8,776,000 in non-recurring costs associated
               with early debt extinguishment; and
             - a reduction of $4,361,000 in financing costs amortization.

Our earnings from continuing operations before income taxes increased
$36,016,000 for the six months ended June 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 $14,862,000 primarily due to higher
        volumes and margins realized;
     -  an increase in Phoenix Fuel's operating income before corporate
        allocations of $1,439,000 primarily due to increased fuel margins
        per gallon sold;
     -  a $3,688,000 gain from insurance proceeds as a result of the fire
        incident at Ciniza in 2004; and
-  an implementation of our debt reduction strategy that resulted in
   the following:

        - a $4,673,000 or 26% decrease in interest expense;
        - a decrease of $8,776,000 in non-recurring costs associated
          with early debt extinguishment; and
        - a reduction of $4,815,000 in financing costs amortization.

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

     -  a $2,166,000 decrease in our retail group's operating income
        before corporate allocations as a result of a 23% decline in our
        retail group's fuel margin due to higher finished product purchase
        prices that could not be recovered in the market.







                                    40


<PAGE>
     YORKTOWN REFINERY

     Our Yorktown refinery operated at an average throughput rate of
approximately 68,449 barrels per day in the second quarter of 2005
compared to 67,639 barrels per day in the second quarter of 2004. For the
six months ended June 30, 2005 and 2004, the average throughput rate was
67,102 and 64,420 barrels per day, respectively.

     Refining margins for the second quarter of 2005 were $7.30 per barrel
and were $6.20 for the second quarter of 2004. Refining margins for the
six months ended June 30, 2005 and 2004 were $7.06 and $5.89 per barrel,
respectively.

     Revenues for our Yorktown refinery increased for the three and six
months ended June 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 six months ended June 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 June 30, 2005 due in part to the following:

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

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

     -  higher purchased costs to meet our processing needs; 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 six months ended June 30, 2005 due in part to
the amortization of certain refinery turnaround costs incurred in 2004.

     FOUR CORNERS REFINERIES

     Our Four Corners refineries operated at an average throughput rate of
approximately 29,811 barrels per day in the second quarter of 2005,
compared to 26,463 barrels per day in the second quarter of 2004. For the
six months ended June 30, 2005 and 2004, the average throughput rate was
29,313 and 27,372 barrels per day, respectively.





                                    41


<PAGE>
     Refining margins for the second quarter of 2005 were $13.48 per
barrel and were $12.44 for the second quarter of 2004. Refining margins
for the six months ended June 30, 2005 and 2004 were $10.72 and $10.30 per
barrel, respectively.

     Revenues for our Four Corners refineries increased for the three and
six months ended June 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 six months ended June 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 six months ended June 30, 2005 primarily due to higher employee,
fuel, chemical, and catalyst costs.

     Depreciation and amortization expense for our Four Corners refineries
remained unchanged for the three and six months ended June 30, 2005.

     RETAIL GROUP

     Average fuel margins were $0.171 per gallon for the three months
ended June 30, 2005 as compared to $0.211 per gallon for the same period
in 2004. Fuel volumes sold for the three months ended June 30, 2005
increased as compared to the same period a year ago due primarily to
favorable travel conditions in areas of operations, and improved demand
over the same period in 2004. Average merchandise margins were 27% for the
three months ended June 30, 2005 as compared to 24% for the same period in
2003. The increase in merchandise margins was due to, among other factors,
lower rebates in 2004.

     Average fuel margins were $0.143 per gallon for the six months ended
June 30, 2005 as compared to $0.187 per gallon for the same period in
2003. Fuel volumes sold for the six months ended June 30, 2005 increased
as compared to the same period a year ago due primarily to favorable
travel conditions in areas of operations, and improved demand over the
same period in 2004. Average merchandise margins were 27% for the six
months ended June 30, 2005 as compared to 25% 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 six months
ended June 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.







                                    42


<PAGE>
     Cost of products sold for our retail group increased for the three
and six months ended June 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 decreased for the three and six
months ended June 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 decreased for the three and six months ended June
30, 2005 as compared with the same periods in 2004, primarily due to a
reduction in payroll costs as a result of lower benefit costs experienced
for the periods in 2005 as compared to 2004.

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

     PHOENIX FUEL

     Gasoline and diesel fuel volumes sold by Phoenix Fuel decreased in
the second quarter of 2005 as compared to the same period in 2004. Average
gasoline and diesel fuel margins for Phoenix Fuel were $0.058 per gallon
for the second quarter of 2005 and were $0.055 per gallon for the second
quarter of 2004. For the six months ended June 30, 2005, gasoline and fuel
volumes increased as compared to the same period in 2004. Average gasoline
and diesel fuel margins were $0.060 per gallon for the six months ended
June 30, 2005 and were $0.054 per gallon for the same period in 2004
primarily due to favorable pricing conditions.

     Revenues for Phoenix Fuel increased for the three and six months
ended June 30, 2005 primarily due to higher average price per gallons
sold.

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

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

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









                                    43


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

     For the three and six months ended June 30, 2005, selling, general
and administrative expenses increased by approximately $1,791,000 and
$1,389,000, respectively, primarily due to higher accruals for management
incentive bonuses associated with increased company financial performance,
but were partially offset by a reimbursement of legal expenses incurred in
previous periods.

     INTEREST EXPENSE FROM CONTINUING OPERATIONS

     For the three months ended June 30, 2005, interest expense decreased
approximately $2,306,000 or 27%. For the six months ended June 30, 2005,
interest expense decreased approximately $4,673,000 or 26%.  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 June 30, 2005
and 2004 were approximately 41.6% and 36.9%, respectively. The effective
tax rates for the six months ended June 30, 2005 and 2004 were
approximately 41.4% and 40.7%, respectively. The differences in the
effective rates are primarily due to the non-deductibility of certain
compensation.

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
volumes and merchandise sales for our retail group are above the prior
year's levels, however, fuel margins 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.










                                    44


<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

     CAPITAL STRUCTURE

     At June 30, 2005, we had long-term debt of $274,622,000. At December
31, 2004 we had long-term debt of $292,759,000. There was no current
portion of long-term debt outstanding at June 30, 2005 or at December 31,
2004.

     The amount at June 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.

     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.

     At June 30, 2005, our long-term debt was 50.3% 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
June 30, 2005, was 44.2%. 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.



                                    45


<PAGE>
     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.

     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.

     We also 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.

     CASH FLOW FROM OPERATIONS

     Our operating cash flow increased by $30,535,000 for the six months
ended June 30, 2005 compared to the six months ended June 30, 2004. This
resulted primarily from an increase in net earnings for the first half of
2005 as compared with the same period last year.

     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.





                                    46


<PAGE>
     Working capital at June 30, 2005 consisted of current assets of
$342,962,000 and current liabilities of $176,909,000 or a current ratio of
1.84:1. 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. The increase is
primarily related to increased costs associated with work to be done at
the Four Corners refineries to comply with clean fuel regulations. Net
cash used in investing activities for purchases of property, plant and
equipment totaled approximately $27,697,000 for the six months ended June
30, 2005 and $19,057,000 for the six months ended June 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 $1,124,000 from the sale of
property, plant and equipment and other assets in the first half of 2005
and $184,000 in the first half of 2004. We also received proceeds of
$1,866,000 in 2005 from the sale of one closed service station/convenience
store and a vacant piece of land. In the first half of 2004, we sold three
stores and a piece of land and received $6,553,000 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.







                                    47


<PAGE>
     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
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 June 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.




                                    48


<PAGE>
     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.

     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 July 2005, we entered into a settlement with the New Mexico
Environment Department and the U.S. Environmental Protection Agency
concerning alleged air quality violations at our Ciniza and Bloomfield
refineries. The settlement is consistent with the judicial consent decrees






                                    49


<PAGE>
that EPA has entered into with other refiners under its national refinery
enforcement program. For a further discussion of matters related to our
settlement, see Note 10 to our Condensed Consolidated Financial
Statements, captioned "Commitments and Contingencies".

     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 six 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 in twelve to
eighteen months from closing.

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;





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<PAGE>
     -  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.

     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 take advantage
of this credit in 2006.

     The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy,
Allied Industrial and Service Workers International Union, formerly the
Paper, Allied - Industrial, Chemical and Energy Workers International
Union, represents the hourly workforce at our Yorktown refinery. Our
contract with the Union was scheduled to expire in 2006. In April 2005,
this contract was extended until 2009. We do not anticipate that the terms
of the new contract will have a material affect on our financial
statements.

     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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<PAGE>
     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;





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<PAGE>
     - unplanned or extended shutdowns in refinery 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;

     - 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;

     - 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;




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<PAGE>
     - 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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<PAGE>
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.





























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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 11 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

     Our annual meeting of stockholders was held on April 27, 2005.
Proxies for the meeting were solicited under Regulation 14A. There were no
matters submitted to a vote of security holders other than the election of
three directors and the ratification of our independent registered public
accounting firm as specified in our Proxy Statement. There was no
solicitation in opposition to management's nominees to the Board of
Directors.

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

Shares Voted "For"   Shares Voted "Withholding"
------------------   --------------------------
    10,186,290                359,327

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

Shares Voted "For"   Shares Voted "Withholding"
------------------   --------------------------
    10,187,015                358,602

     Donald M. Wilkinson was elected as a director of the Company. The
vote was as follows:

Shares Voted "For"   Shares Voted "Withholding"
------------------   --------------------------
    10,219,730                325,887











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<PAGE>
     Deloitte & Touche LLP was ratified as our independent registered
public accounting firm for the Company for the year ending December 31,
2005. The vote was as follows:

Shares Voted "For"     Shares Voted "Against"   Shares Voted "Abstaining"
------------------     ----------------------   -------------------------
    10,350,427                193,865                     1,325

     In addition to the three directors elected above, other members of
our Board of Directors include Fred L. Holliger, Chairman, Larry L.
DeRoin, Brooks J. Klimley and Richard T. Kalen.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

      3.1*  Bylaws of Dial Oil Company.

      4.1*  Sixth Amendment to the Giant Industries, Inc. and Affiliated
            Companies 401(k) Plan Adoption Agreement, effective January 1,
            2004.

     10.1   Fourth Amended and Restated Credit Agreement, dated as of June
            27, 2005, among Giant Industries, Inc., as Borrower, Bank of
            America, N.A., as Administrative Agent, Swing Line Lender, and
            as Issuing Bank, and the Lenders parties thereto. Incorporated
            by reference to Exhibit 10.1 to the Company's Current Report
            on Form 8-K filed July 1, 2005, File No. 1-10398.

     10.2*  First Amendment to Fourth Amended and Restated Credit
            Agreement, dated as of August 4, 2005, among Giant
            Industries, Inc., as Borrower, Bank of America, N.A., as
            Administrative Agent, Swing Line Lender, and as Issuing Bank,
            and the Lenders parties thereto.

     10.3*  Purchase and Sale Agreement, dated as of June 21, 2005,
            between Texas-New Mexico Pipe Line Company and Giant Pipeline
            Company.

     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.






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<PAGE>
     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 May 5, 2005, we filed a Form 8-K dated May 5, 2005,
           containing a press release detailing our earnings for the
           quarter ended March 31, 2005.

     (ii)  On May 26, 2005, we filed a Form 8-K dated May 26, 2005,
           detailing the replacement of our chief accounting officer.

     (iii) On June 23, 2005, we filed a Form 8-K dated June 23, 2005,
           regarding the entry into an agreement to acquire a pipeline.

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

     (v)   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.

     (vi)  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 30, 2005.























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<PAGE>
                                SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report on Form 10-Q for the quarter
ended June 30, 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: August 5, 2005




































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