Valero Announces Common Stock Offering

Valero Energy Corporation (NYSE: VLO) announced it has agreed to offer 6.3 million shares of its common stock through Morgan Stanley & Co. Incorporated and J.P. Morgan Securities Inc. All shares will be offered by Valero under its existing shelf registration statement filed with the Securities and Exchange Commission in March 2002. The net proceeds are estimated to be approximately $250 million. Valero intends to use the net proceeds of the offering for general corporate purposes, which may include debt repayment and the financing of potential future acquisitions.

A prospectus supplement related to the public offering will be filed with the Securities and Exchange Commission. When available, copies of the prospectus supplement relating to the offering may be obtained from the offices of Morgan Stanley & Co. Incorporated, Prospectus Department, 1585 Broadway, New York, New York 10036, and J.P. Morgan Securities Inc., Chase Distribution and Support Services, One Chase Manhattan Plaza, Floor 5B, New York, New York 10081.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state.