OIL PROFIT$ GUSH

Hedgies in clover as energy patch turns around

Investing in anything relating to oil at the beginning of 2016 seemed like the surest way to lose your shirt.

In fact, for some investors, it was.

At least 70 oil and gas companies filed for bankruptcy in 2016, according to data provided by law firm Haynes and Boone.

But for the hedge funds that made the right picks in the troubled industry, energy investments helped them rebound from a disastrous first half of the year.

Mudrick Distressed Opportunity Fund was one of the best-performing hedge funds of 2016, gaining 40.8 percent through Dec. 23, according to data compiled by HSBC.

Jason Mudrick told The Post in December that 2016 “was a good year for distressed generally.” His $1.4 billion fund benefitted from early purchases of energy debt for 30 cents on the dollar before the sector started to rebound.

Hedge funds won on the equity side as well.

Eight of the 10 energy stocks mostly commonly held in hedge funds, according to data compiled by Bank of America Merrill Lynch, ended the year in positive territory.

The biggest winner among the hedge fund favorites was Halliburton, which gained 59 percent, closing out the year at $54.09.

Not far behind were Anadarko Petroleum, Pioneer Natural Resources and Devon Energy, which were each up more than 40 percent for the year.

Losses in two of the 10 en- ergy companies that were down were modest for the year. Valero Energy fell 2.3 percent and Marathon Petroleum lost 2.9 percent.

Marathon’s relative underperformance caught the attention of activist hedge fund El- liott Management in November. It bought a 4 percent stake in the company and believes it could see an 80 percent upside if it splits in three.

The recent exuberance for energy is not entirely surprising.

Energy was the top-performing sector in the S&P 500 in 2016, gaining 25.2 percent and blowing past financial, which was the next-best sector (up 20 percent), according to Select Sector SPDR data. The S&P 500, meanwhile, returned 9.5 percent.

But energy bets — or even hedge fund bets, for that matter —did not seem like such a sure thing at the start of 2016.

In the first few weeks of 2016, oil prices continued a morethan-yearlong race to the bottom — prices stood at nearly $100 a barrel in July 2014 — amid overproduction worries.

Oil finally settled at around $26 a barrel in mid-February — its lowest level since 2003. Although prices quickly rebounded from those lows, oil’s return to Friday’s closing price of $53.83 was choppy as OPEC weighed cutting production in an effort to stanch rapidly falling prices.

In November, OPEC agreed to its first production cut since 2008 and prices traveled upward. The OPEC move was sweet music to hedgies that had jumped into the sector.

Down slightly in 2016’s first quarter, funds invested in energy debt and equity stormed back later in the year — especially after June’s Brexit vote, according to data provided by Preqin. The industry is up 6.3 percent through Nov. 30.