Valero Energy Corporation Provides Third Quarter 2007 Interim Update

San Antonio, TX - (WORLD STOCK WIRE) - October 10, 2007 -- Valero Energy Corporation (NYSE:VLO) announced today that it expects to report third quarter earnings from continuing operations excluding special items in the range of $1.30 to $1.40 per share. The special items consist of a $91 million pre-tax gain on repayment of a loan by a foreign subsidiary and the effects on the computation of diluted earnings per share related to the company's $94.5 million final payment for the accelerated stock repurchase program that was completed on July 23, 2007. Including these special items, third quarter earnings from continuing operations are expected to be in the range of $1.25 to $1.35 per share. The company also expects to report third quarter earnings from discontinued operations of approximately $0.75 per share related to the $827 million pre-tax gain on the sale of the Lima refinery.

The company expects to report lower throughput margins for the third quarter of 2007 as compared to the third quarter of 2006, primarily due to substantially higher feedstock costs resulting from increased premiums for light sweet crude oils and narrower discounts for sour crude oils and other feedstocks. In total, higher feedstock costs are expected to reduce the company's throughput margins by approximately $700 million in the third quarter versus the same quarter of last year.

On the products side, many of the company's products, such as asphalt, lube oils, and petrochemical feedstocks, sold at much lower margins in the third quarter of 2007 than in the third quarter of 2006 as prices for those products did not increase as much as prices for crude oil.

In addition, industry refining margins in the company's West Coast region were substantially lower than in the third quarter of last year.

As to operations, the impact of Hurricane Humberto on the company's Port Arthur refinery as well as operating issues at the company's Port Arthur, St. Charles, and Ardmore refineries during the third quarter of 2007 are expected to contribute to lower throughput margins. In addition, the McKee refinery continued to operate slightly below capacity as the de-asphalting unit is expected to remain offline through the end of the year.

During the third quarter, the company purchased approximately seven million shares of its common stock. From the beginning of the year through September, the company has returned approximately $4.8 billion to its stockholders through the purchase of 68.9 million shares, representing approximately 11 percent of its outstanding shares at the end of 2006. As a result, the company expects to report weighted-average diluted shares outstanding for the third quarter to range between 560 million and 565 million.

Valero's senior management will hold a conference call at 11 a.m. ET (10 a.m. CT) November 6, 2007 to discuss third quarter earnings, which will be released earlier that day and provide an update on company operations. A live broadcast of the conference call will be available on the company's website at www.valero.com.

Valero Energy Corporation is a Fortune 500 company based in San Antonio, with approximately 22,000 employees and 2006 revenues of more than $90 billion. The company owns and operates 17 refineries throughout the United States, Canada and the Caribbean with a combined throughput capacity of approximately 3.1 million barrels per day, making it the largest refiner in North America. Valero is also one of the nation's largest retail operators with approximately 5,800 retail and branded wholesale outlets in the United States, Canada and the Caribbean under various brand names including Valero, Diamond Shamrock, Shamrock, Ultramar, and Beacon. Please visit www.valero.com for more information.

Statements contained in this release that state the company's or management's expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words "believe," "expect," "should," "estimates," and other similar expressions identify forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see Valero's annual reports on Form 10-K and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission and on Valero's website at www.valero.com.

Source: Valero Energy Corporation



Valero Energy Corporation
San Antonio
Investors
Ashley Smith
Director

Investor Relations: 210-345-2744
or
Media
Bill Day
Director
Corporate Communications:
210-345-2928

Website: http://www.valero.com/


Bill Greehey, CEO
Valero Energy Corp
One Valero Way
San Antonio, TX 78249
USA

Phone: (210) 345-2000


Source: Valero Energy Corp
Note: The following press release was submitted by: Valero Energy Corp, and World Stock Wire, Inc. is not liable for the contents of this press release.