Western Refining to Acquire Giant Industries Creating the Fourth Largest Publicly-Traded Independent Refiner and Marketer in the United States

Business Wire, August 28, 2006

EL PASO, Texas & SCOTTSDALE, Ariz. -- Western Refining, Inc. (NYSE:WNR) and Giant Industries, Inc. (NYSE:GI):

--Transaction Adds Scale, Diversifies Western's Business Mix and Increases Western's Crude Oil Throughput Capacity by 84% to Approximately 216,000 Barrels Per Day

--Expected by Western to be Immediately Accretive to Western's Cash Flow and Earnings Per Share

Western Refining, Inc. (NYSE:WNR) and Giant Industries, Inc. (NYSE:GI) today announced that the Boards of Directors of both companies have unanimously approved a definitive merger agreement under which Western will acquire all of the outstanding shares of Giant for $83.00 per share in cash. The transaction is valued at approximately $1.5 billion, including approximately $275 million of Giant's outstanding debt.

After completing the transaction, Western will be the fourth largest publicly-traded independent refiner and marketer in the United States with a total crude oil throughput capacity of approximately 216,000 barrels per day (bpd). In addition to Western's 117,000 bpd refinery in El Paso, Texas, Western will gain an East Coast presence with a 62,000 bpd refinery in Yorktown, Virginia and will gain two refineries in the Four Corners region of Northern New Mexico with a current combined capacity of 37,000 bpd. Western's primary operating areas will encompass the Mid-Atlantic region, far West Texas, Phoenix and Tucson, Arizona, Northern Mexico, Albuquerque, New Mexico and the Four Corners region of Utah, Colorado, Arizona and New Mexico. In addition to the four refineries, Western's asset portfolio will include refined products terminals in Flagstaff, Arizona and Albuquerque, as well as asphalt terminals in Phoenix, Tucson, Albuquerque and El Paso. Western's asset base will also include 159 retail service stations and convenience stores in Arizona, Colorado and New Mexico, a fleet of approximately 100 crude oil and finished product truck transports, and two wholesale petroleum products distributors - Phoenix Fuel Co., Inc. in Arizona and Dial Oil Co. in New Mexico.

"This transaction is a win for our shareholders, employees, customers and the communities we serve," said Western's President and Chief Executive Officer, Paul Foster. "With Giant, we will significantly increase our refining capacity in fast growing, high demand areas and gain an immediate footprint in new, complementary businesses. With this enhanced growth platform and Western's continued financial strength, we will be better able to capitalize on the strong fundamentals in our industry and drive shareholder value.

"We look forward to Giant's employees joining the Western team following closing. I'm confident that the substantial employee talent and operating expertise from both companies will enable us to achieve significant growth from our asset portfolio and realize the substantial upside potential we see with this combination. As we move forward and grow together, we intend to maintain our record of safety and environmental stewardship that has made us an industry leader," continued Mr. Foster.

Fred Holliger, Giant's Chairman and Chief Executive Officer, said, "The transaction provides Giant shareholders with a meaningful return on their investment and recognizes the value of our strategy and assets for our shareholders. The transaction also offers our employees the opportunity to be part of a larger organization with greater economies of scale and resources needed for sustained success in our industry. Western is a company that we know well, and we believe that our employees will benefit from the cultural fit. I thank each of our employees for their many contributions that have helped build Giant and achieve the successes that enabled our shareholders to realize the significant value this transaction will deliver. Giant's Board of Directors has unanimously approved the transaction and will recommend that shareholders vote in favor of it. We are committed to completing the transaction as expeditiously as possible and to ensuring a seamless transition."

Benefits of the Transaction to Western

--Enhanced Refining Platform in Key Growth Areas: By expanding its refining operations from one to four facilities, Western will significantly diversify its operations in fast growing, high demand areas.

In addition, Western will double its lower-cost sour and heavy
        crude processing capacity from approximately 12% currently to
        almost 25%; Western's sour and heavy crude processing capacity
        will reach 46% following the completion of its previously
        announced expansion program at its El Paso facility. The
        Yorktown, Virginia refinery also has the flexibility to
        incorporate future growth initiatives given its ability to
        process cost-advantaged feedstocks.

--Immediate Footprint in Complementary Businesses: Currently Western generates most of its revenues from its refining operations in El Paso. Following the close of the transaction, Western will generate revenue from four different refineries as well as a diverse mix of complementary retail and wholesale businesses.