FRONTIER OIL CORPORATION

1. 1

2. Company Overview
• NYSE Ticker “FTO”
• Independent Refiner
• Wholesale Marketer
• Two Refineries
– Cheyenne, WY 46,000 barrels per day;
Acquired in 1991
– El Dorado, KS 110,000 barrels per day;
Acquired in 1999

3. Value Chain Profit Model
Refining Retail MarketingExploration and
Production

4. Number of U.S. Refineries
0
50
100
150
200
250
300
350
198119821983198419851986198719881989199019911992199319941995199619971998199920002001200220032004
NumberofUSRefineries
More than 170 plant closures

5. 0
1
2
3
4
5
6
7
8
9
10
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
MMBPD
Gasoline Distillate
U.S. Demand for Refined Products
Avg. 1.4%
Avg. 1.7%
Source EIA.

6. There are Three Dimensions to Best Value
Best Product
• Product features that
deliver results
Best Total Cost
• Low price
• High reliability
• Hassle-free basic service
Best Total Solution
• Expert advice
• Responsibility for results
• Tailored basic service
Treacy Model
X
Customer Intimacy

7. Treacy Customer Intimacy
Never the Product Innovator,
but a Quick Follower
Tailored Basic Service
But Still Some Service Glitches
Superb Understanding of
Customer’s Business
Products Without the latest
Features
Expertise in Areas of
Customer needs
Sales Reps That Make
Things Happen
A Little More Expensive,
But Worth It

8. Strategic Control
Value Capture/
Profit Model
Scope
Customer Selection
and Value Proposition
Organizational
Systems
How can I align
all elements of my
organization – people
processes, structure,
infrastructure, and
leadership?
What high value customer
opportunity am I targeting
with what unique and
differentiated customer
proposition?
What profit model
will I harness to
capture value from
this customer?
How will I “build in”
sustainability by
Business Design?
What scope of
activities and
assets are
required?
Business Design

9. 1. Serve the market only as a wholesaler.
2. Eliminates the competition with your customer. (i.e. Exxon, BP, etc.)
3. Sell to customers that can’t buy elsewhere. (i.e. Costco, King Soopers)
4. Always have product available for your customers, even if you buy
additional barrels in the market.
Customer
Selection and
Value Proposition
Customer Selection and
Value Proposition

10. 1. Profit is largely a function of commodity price.
2. Profit from the value chain profit model by staying focused.
3. Make projections based on 5-years averages.
4. Maintain adequate liquidity to meet minimum capital expenditures for down
years that don’t meet profit expectations.
Value Capture/
Profit Model
Value Capture / Profit Model

11. Income Statements
(In thousand dollars except per share)
2004 2003 2002 2001
Revenue 2,861,716$ 2,170,503$ 1,813,750$ 1,888,401$
Costs and Expenses 2,652,242 2,061,178 1,740,908 1,681,720
Gross Margin 209,474 109,325 72,842 206,681
Selling and General Expenses 33,717 19,890 17,248 17,571
Merger Termination & Legal Costs - 8,739 - -
EBITDA 175,757 80,696 55,594 189,110
Depreciation 32,208 28,832 27,332 25,010
Impairment loss on asset - - 363 -
Operating Income 143,549 51,864 27,899 164,100
Interest Expense, Net 20,914 27,637 25,811 28,374
Redemption Costs 14,943
Gain on involuntary conversion of assets 4,411 - - -
Merger Financing Costs, Net - 18,039 - -
Provision for Income Taxes 42,339 2,956 1,060 28,703
Net Income 69,764$ 3,232$ 1,028$ 107,653$
Diluted EPS 2.55$ 0.12$ 0.04$ 4.00$

12. Capitalization
(1)
9 1/8% Sr. Notes were redeemed on December 22, 2003.
(2)
The 11 3/4 % Sr. Notes were redeemed on November 15, 2004, and replaced with $150
million of 6 5/8% Sr. Notes due 2011.
12/31/2004 12/31/2003 12/31/2002
Cash $124.4 $64.5 $112.4
Revolving Credit Facility 0.0 45.6 0.0
9-1/8% Senior Notes
(1)
0.0 0.0 39.5
11-3/4% Senior Notes
(2)
0.0 168.7 168.4
6-5/8% Senior Notes
(2)
150.0 0.0 0.0
Total Long TermDebt 150.0 168.7 207.9
Equity (Book) 240.1 169.3 168.3
Total Book Capitalization 390.1 383.6 376.2
Net Debt 25.6 149.8 95.5
Debt/Capitalization 38% 56% 55%
Net Debt/Capitalization 10% 47% 36%

13. 1. Protect profits by buying cheaper feedstock.
2. Valero can process heavy/sour crude as well, but they don’t sell
a significant number of barrels in our markets.
3. Customers buy from me because I am reliable source of product.
4. No new refineries have been built since 1976 proving barriers to entry
are very high.
Strategic
Control
Strategic Control

14. Light/Heavy Crude Oil Spread
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
5-yr average (2000-2004) 5-yr High 5-yr Low 2005*
*Estimates for 1st
quarter 2005

15. WTI/WTS Crude Oil Spread
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
Jan Feb Mar Apr Ma Jun Jul Au Se Oct Nov De
2005* 5-yr average (2000-2004) 5-yr High 4-yr Low
*Estimates for 1st
quarter 2005

16. 1. We are an independent refiner and wholesale marketer….nothing else!!
2. We sell gasoline, distillate, asphalt and a few other byproducts.
3. Strategic partners for crude supply arrangements and product off-take
agreements can help reduce volatility.
Scope
Scope

17. 1. Management must stay focused and disciplined on the strategy.
2. Evaluate acquisitions carefully with strict return on capital thresholds
3. Make sure acquisition target fits strategically with exisiting assets and
4. Create a culture and reward system that drives employees to returns,
bonuses are paid based on overall corporate performance.
Organizational
Systems: Viability
and implementation
Organizational Systems

18. Revenue Market Value Market Value
($ in B) ($ in B) Revenue
Holly 2.3$ 1.1$ 47.8%
Frontier Oil 2.9$ 1.1$ 38.3%
Valero 54.6$ 19.1$ 35.0%
Premcor 15.3$ 5.3$ 34.6%
Sunoco 25.5$ 7.2$ 28.2%
Tesoro 12.3$ 2.6$ 21.1%
Giant 2.5$ 0.3$ 13.6%
Industry Value Migration

19. Time (years)
Profit
Extend and defend
existing core businesses
Horizon 2
Build emerging
businesses
Horizon 3
Create viable
options
Horizon 1
The Three Horizons

20. Frontier Return on Capital Employed
(1)
(1)
EBITDA/Beginning of Year Capital.
28.1%
39.6%
21.5%
14.6%
55.0%
0%
10%
20%
30%
40%
50%
60%
2000 2001 2002 2003 2004
5-yr avg.
31.8%

21. Strategy for the Future
Reduce/Refinance existing senior notes
Increase quarterly dividend
• Repurchase Company stock / Pay special
dividends
• Seek accretive high return acquisition
• Explore Canadian crude supply
partnerships
• Consider being acquired instead of being
an acquirer