Valero Energy Corporation to Sell Lima Refinery to Husky Energy for $1.9 Billion

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May 2, 2007

Valero Energy Corporation (NYSE:VLO) announced today that it has agreed to sell, subject to regulatory approvals, its 165,000 barrel per day refinery in Lima, Ohio to Husky Energy Inc. (TSE:HSE) for $1.9 billion, plus net working capital estimated at $200 million to be valued at closing. The Boards of Directors of both companies have approved the transaction and the sale is expected to close during the second quarter.

"We're pleased to have such a high-quality buyer for this facility," said Bill Klesse, Valero's Chairman and Chief Executive Officer. "This is an excellent outcome for Valero, for the Lima employees and their community. They are going to have a great new operator of this facility for the long term. Husky is a leading Canadian energy producer who will now have the opportunity to expand their system and create a home for their growing supply of heavy Canadian crude oil. Introduction of new heavy crude supplies into the U.S. market from Canada should make a significant contribution to long-term energy supply security, particularly for the Midwest region."

Valero had announced in February that as part of its strategy of improving its returns by focusing on operations and financial performance, it was exploring strategic alternatives for the Lima refinery, which it had acquired through its 2005 purchase of Premcor Inc.

"As part of our balanced approach to investing cash to generate higher returns for our shareholders, we anticipate using proceeds from the sale to purchase more of our shares later in the year," said Klesse.

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