Frontier Oil Reports Most Profitable Quarter in Company History

HOUSTON, Aug. 8 /PRNewswire-FirstCall/ -- Frontier Oil Corporation (NYSE: FTO) today announced record quarterly net income of $243.8 million, or $2.23 per diluted share for the quarter ended June 30, 2007, compared to the prior record quarterly net income of $145.9 million or $1.29 per diluted share, for the quarter ended June 30, 2006. For the six months ended June 30, 2007 net income totaled $318.5 million, or $2.90 per diluted share, compared to $203.2 million or $1.80 per diluted share for the six months ended June 30, 2006.

Frontier's record quarterly results were achieved despite a planned 30-day plant-wide shutdown at the Cheyenne Refinery. As a result of the Cheyenne turnaround, total charges for the second quarter of 2007 fell to 163,991 barrels per day compared to 171,426 for the second quarter of 2006. However, the Company stored intermediate and finished product inventories during the first quarter of this year, allowing product sales to average 173,888 barrels per day for the most recent quarter compared to 173,642 barrels per day for the second quarter of 2006.

Second quarter 2007 results were impacted by several competitor refinery outages that reduced gasoline and diesel supplies in our markets. The gasoline crack averaged a record $36.73 per sales barrel for the second quarter of 2007 compared to $20.92 per sales barrel for the same period in 2006. The diesel crack spread averaged a record $29.08 per sales barrel for the quarter ended June 30, 2007, compared to $23.49 per sales barrel for the second quarter of 2006. For the second quarter of 2007, the Cheyenne Refinery's light/heavy differential averaged $14.17 per barrel and the light/heavy spread at the El Dorado Refinery averaged $18.78 per barrel. The WTI/WTS spread averaged $4.59 per barrel for the quarter ended June 30, 2007.

Frontier's Chairman, President and CEO, James Gibbs, commented, "We are very pleased with our extraordinary quarterly results. The coker and crude fractionation projects in Cheyenne are substantially complete, with the final phase of the coker project to be completed in the fourth quarter of this year. We continue to make good progress on our expansion projects in El Dorado. Although we have seen deterioration in product margins from the record cracks of the second quarter, our product markets continue to be among the best in the United States. Additionally, both the light/heavy crude oil spread and the WTI/WTS spread have improved thus far in the third quarter."

For the three months ending June 30, 2007, Frontier generated $248.9 million in cash before changes in working capital while investing approximately $94.4 million in capital expenditures. Frontier's cash balance at June 30, 2007 increased to $530.3 million despite $98.5 million in share repurchases during the quarter. There were no borrowings under the Company's revolving credit facility. Frontier's cash exceeded its debt by $380.3 million as of June 30, 2007. For the six months ending June 30, 2007, Frontier generated $371.5 million in cash before changes in working capital while investing approximately $154.6 million in capital expenditures and $128.2 million in share repurchase. The Company has spent an additional $20.0 million to repurchase its shares since June 30, 2007 and in 2007 has repurchased a total of 4.1 million shares and spent approximately $150.0 million of the current $200 million share repurchase authorization.

The second quarter 2007 results include an after-tax inventory gain of approximately $20.0 million or $0.18 per diluted share, compared to a gain of $23.6 or $0.21 per diluted share, for the same period of 2006. The six months ended June 30, 2007 include an after-tax inventory gain of approximately $22.0 million or $0.20 per diluted share, compared to a gain of $23.6 million, or $0.21 per diluted share for the same period in 2006.

Conference Call

A conference call is scheduled for today, August 8, 2007, at 11:00 a.m. eastern time, to discuss the financial results. To access the call, please dial (800) 500-0311. For those individuals outside the United States, please call (719) 457-2698. A recorded replay of the call may be heard through August 22, 2007 by dialing (888) 203-1112 (international callers (719) 457-0820) and entering the code 1478187. In addition, the real-time conference call and a recorded replay will be webcast by PR Newswire. To access the call or the replay via the Internet, go to http://www.frontieroil.com/ and register from the Investor Relations page of the site.

Frontier operates a 110,000 bpd refinery located in El Dorado, Kansas, and a 52,000 bpd refinery located in Cheyenne, Wyoming, and markets its refined products principally along the eastern slope of the Rocky Mountains and in other neighboring plains states. Information about the Company may be found on its web site http://www.frontieroil.com/.

This press release includes "forward-looking statements" as defined by the Securities and Exchange Commission. Such statements are those concerning strategic plans, expectations and objectives for future operations. All statements, other than statements of historical fact, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward- looking statements. These statements are based on certain assumptions made by the Company based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements.

                           FRONTIER OIL CORPORATION

                              Six Months Ended        Three Months Ended
                                  June 30,                 June 30,
                                        2006 (1)               2006 (1)
                            2007     As Adjusted     2007   As Adjusted
  INCOME STATEMENT DATA
   ($000's except
    per share)
  Revenues                $2,482,583  $2,327,559  $1,434,700 $1,315,366
  Raw material, freight
   and other costs         1,804,805   1,829,095     964,940    995,608
  Refining operating
   expenses, excluding
   depreciation              140,977     139,881      69,814     70,547
  Selling and general
   expenses, excluding
   depreciation               24,615      21,729      13,583     12,815
  Loss on sale of assets       2,028          --          --         --
  Operating income before
   depreciation              510,158     336,854     386,363    236,396
  Depreciation, accretion
   and amortization           23,193      18,908      12,070     10,041
  Operating income           486,965     317,946     374,293    226,355
  Interest expense and
   other financing costs       4,948       5,282       1,992      2,847
  Interest and investment
   income                    (11,647)     (6,456)     (6,320)    (3,910)
  Provision for income
   taxes                     175,181     115,903     134,858     81,554
  Net income                $318,483    $203,217    $243,763   $145,864
  Net income per diluted
   share                       $2.90       $1.80       $2.23      $1.29
  Average shares
   outstanding (000's)       109,877     113,211     109,304    113,336

  OTHER FINANCIAL DATA
   ($000's)
  EBITDA (2)                $510,158    $336,854    $386,363   $236,396
  Cash flow before changes
   in working capital        371,500     232,308     248,898    163,487
  Working capital changes     37,275     (70,251)     20,170     48,381
  Net cash provided by
   operating activities      408,775     162,057     269,068    211,868
  Net cash used by
   investing activities     (154,581)    (74,801)    (94,442)   (37,712)

  OPERATIONS
  Consolidated
  Operations (bpd)
    Total charges            165,253     168,828     163,991    171,426
    Gasoline yields           78,740      81,680      79,921     79,817
    Diesel yields             58,386      53,748      55,437     54,857
    Total sales              172,324     169,176     173,888    173,642

  Refinery operating margins
   information ($ per bbl)
    Refined products revenue  $79.55      $75.85      $90.44     $83.23
    Raw material, freight
     and other costs           57.86       59.73       60.98      63.01
    Refinery operating
     expenses, excluding
     depreciation               4.52        4.57        4.41       4.46
    Depreciation, accretion
     and amortization           0.74        0.61        0.76       0.63

  Cheyenne Refinery
   light/heavy crude oil
   differential ($ per bbl)   $13.71      $17.09      $14.17     $15.19
  WTI/WTS crude oil
   differential ($ per bbl)     4.47        5.66        4.59       4.89
  El Dorado Refinery
   light/heavy crude oil
   differential ($ per bbl)    15.59       25.22       18.78      25.41


  BALANCE SHEET DATA ($000's)       At June 30, 2007  At December 31, 2006
  Cash, including cash
   equivalents (a)                      $530,321            $405,479
  Working capital                        539,541             479,518
  Short-term and current debt (b)             --
  Total long-term debt (c)               150,000             150,000
  Shareholders' equity (d)               967,202             775,854
  Net debt to book
   capitalization (b+c-a)/(b+c-a+d)       -64.8%              -49.1%


  (1)  During the fourth quarter of 2006, the Company adopted a change in
       its accounting method for the costs of turnarounds from the accrual
       method to the deferral method.  Turnarounds are the scheduled and
       required shutdowns of refinery processing units for significant
       overhaul and refurbishment.  Under the deferral accounting method,
       the costs of turnarounds are deferred when incurred and amortized on
       a straight-line basis over the period of time estimated to lapse
       until the next turnaround occurs.  The new method of accounting for
       turnarounds was adopted in order to adhere to FSP No. AUG AIR-1
       "Accounting for Planned Major Maintenance Activities" which prohibits
       the accrual method of accounting for planned major maintenance
       activities.  The Company elected to early adopt the FSP in the fourth
       quarter of 2006.  The comparative financial statements for 2006 have
       been adjusted to apply the new method retrospectively.

  (2)  EBITDA represents income before interest expense and other financing
       costs, interest and investment income, income tax, and depreciation,
       and amortization. EBITDA is not a calculation based upon generally
       accepted accounting principles; however, the amounts included in the
       EBITDA calculation are derived from amounts included in the
       consolidated financial statements of the Company.  EBITDA should not
       be considered as an alternative to net income or operating income, as
       an indication of operating performance of the Company or as an
       alternative to operating cash flow as a measure of liquidity. EBITDA
       is not necessarily comparable to similarly titled measures of other
       companies.  EBITDA is also used for internal analysis and as a basis
       for financial covenants. Frontier's EBITDA for the six months and
       three months ended June 30, 2007 and 2006 is reconciled to net income
       as follows:

                                 Six Months Ended     Three Months Ended
                                     June 30,              June 30,
                                          2006 (1)              2006 (1)
                                2007     As Adjusted   2007  As Adjusted

  Net income (loss)           $318,483    $203,217   $243,763   $145,864
  Add provision (benefit)
   for income taxes            175,181     115,903    134,858     81,554
  Add interest expense and
   other financing costs         4,948       5,282      1,992      2,847
  Subtract interest and
   investment income           (11,647)     (6,456)    (6,320)    (3,910)
  Add depreciation, accretion
   and amortization             23,193      18,908     12,070     10,041
  EBITDA                      $510,158    $336,854   $386,363   $236,396