Woodside Energy Group Ltd. (ASX:WDS)'s announcement last week that it had opted not to sell its interests in the Macedon and Pyrenees oil and gas assets in Western Australia left some perplexed. In recent weeks The Carlyle Group Inc. (NasdaqGS:CG) was believed to be in pole position to buy the assets. Woodside says Macedon continues to be a critical source of gas to the West Australian domestic market and it continued to see strong value in both assets.

It is understood the asking price was around $700 million, and Carlyle had worked through most of the matters relating to remediation costs on the Pyrenees business. One possibility is that it just wasn't there on price. Another explanation is that the decision reflected the government's desire to see more gas produced in the domestic market, which would require Woodside to retain Macedon.

Woodside has issued press statements defending its contribution to the state's gas market, saying it always has and always will support the needs of the Western Australia market. It last year hired Morgan Stanley to sell Macedon and Pyrenees, a mature oil and gas field with 24 wells with rehabilitation costs of about $1 billion. The Australian energy champion has indicated it is keen on acquisition opportunities offshore, such as the Gulf of Mexico.

As earlier reported, the thinking now is it is dialling down the rhetoric around mergers and acquisitions following recent takeover talks with Santos coming to an end, and will focus on operations until the right deal presents itself. Observers say Woodside has plenty of free cash flow from its assets to take it through from 2025 to 2028 before it needs to assess new opportunities.