Reporter's Notebook
An oil company gets into the restaurant business

An oil company gets into the restaurant business

Anybody who buys gas can tell that oil prices are down. The price for a barrel of crude oil is half of what it was a year ago.

And anybody who reads these pages knows that fast-casual restaurants are in a boom market. You can make an awful lot of money in the business, as investors in newly public chains The Habit Restaurants Inc., and Shake Shack Inc. can attest.

So maybe it’s only natural that an oil company would give up on that business and get into fast casual restaurants — which is exactly what happened this week when Nexus Energy Services Inc., announced plans to buy Illegal Restaurant Group Inc.

Illegal Restaurant Group operates Illegal Burger LLC, a two-unit, fast-casual burger chain out of the Denver area.

Nexus Energy describes itself as a mid-level provider of oil pipeline and other services in Texas, Louisiana, Oklahoma, Kansas, South Carolina and New Mexico. It is a small company traded publicly over the counter. At least it was.

In the merger, Nexus Energy will change its name to Illegal Restaurant Group, and the company will no longer provide oil and gas services but will instead flip burgers and fry potatoes.

“Due to the recent downturn in oil prices, the company will cease oil and gas operations and is pleased to move into the restaurant sector,” the companies said in a press release. The companies said that the combination of “strong revenues” and a “red hot sector” would be the key to success for the company’s shareholders.

For Illegal Burger, the move will make it a publicly traded company and could help the chain expand. The chain has revenues of just over $2 million a year, according to the company, and is expected $10 million to $15 million in revenues in the first year as the chain grows.

“Our success as a company over these last few months has convinced us that merging with (Nexus Energy) is the right move for our company,” Jim Nixon, Illegal Burger’s CEO, said in a statement. “This will help catapult us into the next phase of our branding and public marketing campaign as well as help retain quality leadership for our expansion both on a corporate and franchise level.”

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