Daily Brief Australia: COG Financial Services, Iron Ore, ADX Energy Ltd and more

In today’s briefing:

COG Financial Services (ASX:COG)
[IO Technicals Weekly 2024/39] Iron Ore Surges on China Stimulus
ADX Energy (ASX: ADX): Welchau Is About Oil Rather than Gas: Perhaps Smaller but Higher Value Boe

COG Financial Services (ASX:COG)

Following on from my decision to pass on Euroz another company I looked further into was COG Financial Services.
Unitholders may be well familiar with this already as the second bidder for Diverger, and substantial shareholder of Centrepoint Alliance (Given I invested in both this says something about their capital allocation).
COG is another financial services business operating predominately in the space of asset finance brokering and lending.

SGX Iron Ore futures surged by $10.24/ton to $102.09/ton last week, hitting the highest level since July, driven by China’s stimulus announcement.
A bullish technical signal emerged as the 9-day moving average crossed over the 21-day, yet RSI overbought levels (72.35) suggest a potential correction.
Trading volume spiked mid-week but thinned near $105/ton, indicating waning volume above $100/ton and setting up volatility for a short-term price drop.

Welchau is now interpreted as a light oil rather than a gas condensate discovery based on detailed analysis of samples recovered from the well and other well data.
While this means that the energy equivalent hydrocarbon volumes may be smaller than the original pre-drill estimates, onshore oil can be more valuable than gas to a small company due to the ability to produce and progressively develop a field without having to first prove up sufficient reserves to underwrite a pipeline and secure a gas contract.
Welchau is estimated to hold 90-95% oil and the production from Welchau-1 could be trucked to a point of sale or to ADX’s existing 3,000 bbl/d Anshof facility for processing when stable flows can be established.

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